There are few things in life that can become as profitable as property development. The reason it’s such an attractive investment option for beginners is due to how “at home” people tend to feel when dealing with property. For instance, if you’re going to sell a home, then you already know what a home should have and what affects the price. You know that there are different types of home, you know what a good home should look like, and you know what a budget home should contain. As a result, a lot of people feel like they have a good grasp of the property market, how to manipulate it, and how to provide buyers with something they’ll love.
Unfortunately, this mentality can often lead you into some unfavourable circumstances. You might end up purchasing a property with the intention of selling it to a wealthy audience, only to realise that wealthy people aren’t common in that area. Alternatively, you could waste an opportunity by developing cheaper accommodation in a highly sought-after area where deep pockets are common. In short, everyone falls into the trap of trying to appeal to the audience (a common business strategy) in the real estate market, only to realise that they have no clue what they’re doing a couple months in.
Sadly, this isn’t all too uncommon. Just because you live in a house and you have some idea of what you personally want, that doesn’t mean you can mirror your personal tastes and try to start a career out of it. You have to realise that everyone looks for something different in a home and it’s important to understand the market before tackling it. People often complicate things so much by trying to appeal to audiences, trying to coincide their property developments with seasonal occasions, or even try to predict where the next big housing area will be. While all of these are viable strategies to gain an upper hand in the market, they’re also high-risk options and it doesn’t make sense for an amateur to delve into those options when there are much more simple, safer, yet still profitable options available.
To help you out in your property development endeavours, here are a couple of useful tips, tricks, and things to avoid when you’re starting out in this profitable industry.
There are no guarantees in the property market
It doesn’t matter how “safe” you think an investment is—there’s no guarantee that it will give you capital. You could purchase a new property for an extremely low price and try to sell it for double the price, but there’s absolutely no guarantee that you’re going to make a profit. There has to be a reason you were able to purchase a new property for a low price. Perhaps there are structural issues, perhaps it doesn’t comply with building standards, or maybe the area is becoming a ghost town and, as a result, house prices are dropping drastically and people are making quick sales to rid themselves of property.
Get it into your head that there’s no such thing as a guaranteed sale in the property market. Don’t pretend there are safety nets to hide behind when you invest in the property market because things can change overnight if you aren’t careful. Always think about your developments and never jump at bargains just because you think something is worth the money. Always do your research, never panic sale at lower prices and never buy something just because it’s a little lower than the average price for a property in the area.
Keep it simple by looking at a house for sale, developing or renovating it, and then selling it for more. That’s the simplest way to make money in the property market and while it’s still not a guarantee, it’s the most reliable method of trying to make money in this industry. Don’t jump on trends, don’t look at “100% guaranteed” strategies of making money, and don’t invest your time into fads. Hard work pays off when you get involved with the property market, and slow gains will always beat out risky developments.