Common mistakes for first time real estate developers
1. Due Diligence
General and Specific Site/Location due diligence is essential. This is why before going into any new developments, you need to be aware of the general property, development regulation, and the legislative process in your areas so you can begin to get an idea of the possibilities.
2. Underestimating Costs
With property development, there are several costs you will need to account for in the beginning. To start this process, you should begin speaking with a development builder or design and construction team. They will be able to give you an accurate rundown of the costs associated with your plan.
3. Over Capitalizing on Designs
Planning your project's design will be essential to your success. A project's design should be relative to the area that is located. An example of this would be in the material selection, where you would want to choose a similar material as the surrounding area. Applying super expensive upgrades when comparable properties are much lower can make recovering those costs harder.
4. Engaging with Professionals based on price
Many times developers choose to work with professionals based on their price. A saying that holds in this instance is “you get what you pay for.” That is why engaging and doing business with professionals will pay dividends in the long run. Most of the time, development projects go under due to unforeseen costs or circumstances, and with a professional running your project, they will be able to account for all of these scenarios.