Property investment is a risky but also profitable venture, and it can earn you a fortune and also leave you with mortgage for the rest of your life and bankrupt. Buying a home is one of the biggest deal in most people’s life, and most of us have to borrow a loan and take decades to pay off to be able to afford a property. All because the prices of a home is extremely high in pretty much every city in the world. Many countries have been trying to put a hold onto the skyrocketing increasing prices of property. Some people engage a property developer when buying a property, while some others consider becoming a property developer as an additional way of income. You should be more cautious and overlooking if you consider investing in property and become a property developer. Here I have 4 tips for you if you are going to start a property developer business.
1. Location, Location, Location
For a property, one of the most important factors is the location. You can pretty much say, location is everything. Everyone thinks they know what that means, but they don’t. A good location doesn’t mean the fanciest and best areas in town. A good location means a best price for a property in a good area that you can make profit from. A property that is near school, public transportation and green area is usually easier to sell and takes less time to sell than those that are far from everything in remote areas.
2. You Make Money When You Buy, Not When You Sell
How does a personal property developer make profit? They make money when they buy, not when they sell. They don’t try to get the highest price when they sell, instead they try to buy a property with a best price. Every dollar you bargain off goes straight into your pocket.
3. Do Your Homework
Property development is a risky business. You could make a fortune, or you could lose everything. Before you buy, you should do your research comprehensively. Find out the prices of property in that area, stamp duty and searches and fees. Also you should find out the cost of refurbishment, and if there are any restrictive covenants. Do your sums and work out what your target group is, how much you will realistically get and more importantly, whether the profit margin is worthwhile.
4. Keep Looking
Real estate agents are not the only way when it comes to buying property. There are so many other properties that don’t sell through real estate agents. The fees can be avoided if the sale is done privately. You don’t need to worry if the property is derelict, the Land Registry will help you trace the owner.
5. Avoid the Mistake Made By Amateurs
Property developing is not an easy money earner, either a fast money earner. It is highly risky and important and difficult. If you don’t do it right, it could potentially leave you broke and bankrupt. It is a common conception that people think a property developers just sit back and wait for the value of the property to go up automatically. Let’s get real, property developing means adding value and developing value, instead of gamble with the market.