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Property and holiday accommodation with wheelchair access

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nickmarr
 Buying properties to do up and sell for a profit is an exciting way of making money. It’s challenging, rewarding and there’s potential for big profit margins. But do you know what you’re doing? Here are five things to avoid when getting into property development…

1. Buying in the wrong area
As Kirstie and Phil have been saying for years, it’s all about location, location, location. Buying in a less popular area will help you bag a bargain, but you might have a harder time selling it on or renting it out if you’ve invested in an area that doesn’t have much going for it. A good tip is to check out whether or not there are new housing estates being built in the area, a new supermarket moving in, or talk of a location being ‘up and coming’. These are all signs that an area could be worth investing in.

2. Biting off more than you can chew
Avoid taking on a challenge that’s bigger than you can handle. This is particularly important if it’s your first property or you already have a series of properties on your books requiring time, money and attention…being intimidated or being spread too thinly will make property development very stressful! So, ensure you have the money and expertise to tackle anything from a simple paint job to a vaillant boiler installation. It’s also equally as important to not take on more debt than you can comfortably manage too, so don’t forget to consider financial challenges, as well as practical ones.

3. Thinking you can do it all yourself
It takes a very determined, very skilled and very ‘hands on’ person to develop a property on their own. Only take on major work if you’re confident you can do it well, or make peace with just taking on some of the smaller challenges. For instance, if you’re prepared to pay builders to do the majority of the work but are insistent on saving a few quid on the paint job on some exposed metalwork, make sure you use a product that doesn’t leave brush or roller strokes unless you want to put off potential buyers or tenants!

4. Not formalising agreements with contractors and tradesmen
 Estimates are informed guesses about the price of a piece of work, and so you shouldn’t rely on them completely or become frustrated with a tradesman if he later provides you with a higher bill. On the other hand, quotes aremorereliable as they are figures that have been drawn after investigating your property fully, so make sure you know the difference! To avoid falling out with workmen or getting into financial difficulty, ask questions, form legal contracts and put all agreements in writing.

5. Over or underestimating what you need to do
Finally, don’t make the mistake of installing finishes that are too high-end or too cheap for the area you’re invested in. For instance, a wealthy suburban location justifies expensive finishes such as granite worktops and oak doors as you’ll (hopefully) recoup what you’ve spent. However, in a less affluent area, these finishes will go un-recovered when you sell or let the property, or buyers and tenants will be unable to afford your property, steering clear of it completely. Research an area and property values using a site like Zoopla before you begin development.

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