03 May Avoid These Common Property Development Mistakes!
You’ve got the imagination… the initiative… and the audacity to take on a property development project in Sydney, Melbourne, Canberra or Brisbane. You’ve taken a deep breath and you’re ready to juggle local market trends, development costs, regulations, economic conditions and buyer preferences.
But are you ready to make mistakes?
Successful property developers know that it’s easy to make mistakes that can blow the budget and derail even the most well-conceived project. Here are the top three mistakes that developers make, and how to avoid them.
1. Underestimating Project Time and Costs
Many developers learn the hard way. It’s better to be overly pessimistic when you’re planning your costs and timeline. Err on the high side. Give yourself a cushion. Better yet, work with a seasoned property development management service! Save money, time, hassle and worry by letting our team of professionals handle the estimating, planning and development stages of your project from start to finish!
2. Poor Planning and Execution
How engaged are you in the planning process? Relying too heavily on various professionals can lead to conflicting information that can make it tempting to just jump in and let things evolve. This can work if you know your way around, but if you’re faced with an overwhelm of information and you neglect to have a plan in place, you’re going to pay for it later in lost income as the project goes over budget and over time.
Like any big undertaking, real estate development is a team effort. Your key teammate is a property development manager who is your single point of contact – your advocate, your ambassador, your ally… helping you to understand the process, come up with a realistic plan, manage various professionals and get the job done.
3. Poor Funding
You don’t have to limit yourself to being funded by banks! Banks historically provide 60-80% of funding for a development project – so where do you get the rest? Many investors think that they will be able to secure additional funding for contingencies as the project progresses – but that’s never a guarantee. Do your homework. Emerging trends in crowdfunding and peer-to-peer lending mean you have more options. Get all of your funding, including a cushion, ahead of time. Don’t get stuck halfway through your project with zero in the bank account!
It probably comes as no surprise that these are rookie mistakes – and yet you’d be equally surprised at how many veteran developers haven’t learned enough about the development process itself, to make the best decisions.
Take the guesswork, stress and hassle out of it! Work with Neal at White Gorilla Developments, and avoid these common property development pitfalls. We are here to make you money. Our passion is helping people build wealth through property development. We are on your side, every step of the way!