5 Common Mistakes to Avoid as a New Property Developer
The property development industry is a high stakes industry. There’s a lot of money to be made, and there’s a lot to be lost. If you’re new to the industry, you need to know a few things to get ahead. With a bit of foresight and planning, you can make your mark in the industry, build something you’re proud of and walk away with money in your pocket. So, what are the five common mistakes to avoid as a new property developer? The best way to get started is to get your head around these dos and don’ts.
Mistake #1: You Don’t Know Your Role
Property development runs on more than enthusiasm, so think about where your talents lie and what skills you have before you start. Remember, you cannot do everything; you need to have realistic expectations of yourself and be confident about what you can bring to the team. Have you studied property development? Have you got a marketing, architecture, construction, real estate, or finance background? Knowing your role is the first step to getting started.
Mistake #2: You Aren’t Following a Plan
Going with the flow isn’t an option. Conducting due diligence and feasibility studies is an essential aspect of planning your project. These tasks involve writing a business plan, getting cost estimates, finding the property, working on a concept, and researching whether the location is appropriate. When you search the zoning database, you will also be able to ensure that the zoning of the area corresponds with your proposed development. Remember that a successful project needs to be completed and successfully sold or rented too!
Mistake #3: You Don’t Have Finance
Property development projects require a significant financial investment, and it’s your job to either find capital, get a loan, or partner with an investor. Figuring out your budget is also an integral aspect of conducting due diligence. You will factor in the cost of the property, construction, design, amongst many other expenses. Planning your finances will ensure you don’t run at a loss, and you know what your return on investment will be. Don’t forget to factor in unforeseen circumstances.
Mistake #4: You Don’t Have a Team
Once you have secured finance, you need to get hiring. Noting where your skills lie, you will be able to choose your team. When hiring a team, remember that while you will be an integral part of the project, you cannot do everything. Amongst the team members you will need are an accountant, a property lawyer, an architect, a construction team, a project manager, a real estate agent, and a marketing team.
Mistake #5: Not Investing in Software
Property development involves a lot of different disciplines, and when you have a lot of different things to think about at once, the best way to manage those things is with purpose-built software. Good software will streamline your workflow and help you track your progress. Property development software and project management software will be essential investments for the duration of your project.
If you’re ready to get that project underway, contact Archistar today for a demo and find out if Archistar property development software is right for you.