Are you looking to get into property development in or around Harrogate?
Many are tempted by the idea of buying a house, doing it up and selling it on for a profit. Sadly this is not as easy as it first appears. Property renovation is usually accompanied by all sorts of pitfalls and unpleasant surprises and even in a rising market like Harrogate, they can lose money. It is very easy for beginners to underestimate the cost of a build and the time it will take to complete.
From cheap wood flooring to lavish marble bathrooms, here are ten errors made by fledgling property developers.
1. Buying in the wrong area
This is one of the most common errors that a developer could make. There might be the belief that a certain location will be the next up-and-coming area – but if it’s not a nice place to live right now, why would anyone be keen to buy there (and at premium prices too?). Houses on or off very busy main roads and those in areas with poor transport links, for example, are always going to sell but usually with a discount. Many new developers think it’s easier to find a good opportunity than it actually is. Competition in Harrogate is fierce; we are a town obsessed with all things property!
2. Paying expensive rates for finance
Developers should not be tempted to borrow more than they can afford, no matter how much money they think they are going to make. They should always shop around for the best possible deal and be realistic about how much the whole renovation project is going to cost and the time it is going to take to complete.
3. The wrong builders
All renovation projects are basically only as good as the building team. Developers should check out the builders’ work first and get reports and references from past clients. Before giving the builder the go ahead you should try and agree a fixed price contract – without this it is easy to end up over spending if the build takes far longer than expected.
4. Scrimping on quality
There are cheaper imitations of the handmade tiles, oak floors and composite work surfaces used in the most expensive developments, but they are to be avoided. As tempting it is to buy the cheapest of everything, potential buyers will immediately notice if corners have been cut. Copying other developers at a lower standard rarely pays off. Even if the budget is small, it’s best to choose appliances, fixtures & fittings which will last, and not because they resemble something more expensive. Above all, developers shouldn’t scrimp on the exterior; the majority of buyers have decided if they are interested the property before they’ve even stepped through the front door.
5. Going overboard
It’s equally ill advised to over-design and specify. Buyers can be put off by ‘fussy’ decor. A clean, fresh finish rather than anything too fancy will be a solid starting point for most tastes.
6. Getting too personal
Developers inflicting their own taste on a project can alienate buyers. Neutral does not mean boring. Aim to keep rooms as bright and light as possible, giving buyers a blank canvas on which to project their own ideas.
7. Cramming a house with bedrooms
Contrary to what many starting developers think, more bedrooms doesn’t necessarily mean a more valuable house. Buyers want quality space rather than cramped living conditions. Bedroom wardrobes and dressing areas should be prioritised over irrelevant box rooms. First-time developers should focus on the layout of their project, ensuring that the rooms flow together and there is a balance of entertaining space, living space and bedrooms. If the space planning is poor, even having a high-quality finish will not be enough to make a sale.
8. Rushing in
Some new developers are so keen to turn a profit that they often start work without proper plans – or even planning permission. The more plans that are in place, the more cost and time efficient the project. Developers should make sure that all the necessary paperwork is in place before starting work, so that there is no delay or frustration further down the line.
9. Greed
Developers might think that their house is considerably better than when purchased, but this doesn’t necessarily mean it’s worth a great deal more. Overpricing can be a major obstacle to achieving a good sale. If the house is on the market for too much money it will sit and go stale. Buyers in Harrogate are very savvy and have a good idea of how much they want to be spending. It’s a sensible idea to get a property expertly valued by at least three good local estate agents (including Myrings, of course!).
10. Bad Timing
The bank manager may be breathing down the developer’s neck but it’s a bad idea to launch a house on the market on Christmas Eve. An estate agent will be able to advise on the best marketing strategy.
To Conclude…
We’ve discussed some common mistakes – but will conclude with a few words of encouragement and advice.
Come along and see the Myrings team, talk to us and enjoy a free no-obligation chat about profitable property development. We can expertly advise on how to avoid each and every one of the common pitfalls.
We are here to help and are always happy to help. Call us today on 01423 566400 or pop into our office for a chat.
