Tag Archive | Property Development

Property Developer Strategies: The Sinking Market

Property development and real estate are fickle businesses. One minute, you can be on the top of the world and feel like nothing will ever bother you. Your business is booming, your portfolio looks fantastic, and you couldn’t be happier. Then the next day, everything is crashing around you.

There is an element of property developing that is always going to be dependent on a factor you can’t control: the economy. House prices are one of the biggest indicators of whether or not an economy is doing well. If they begin to sink, it suggests a lack of consumer confidence, meaning that storm clouds are gathering on the horizon.property

So when you are a property developer, there is an element of your business that is totally outside of your control. You are subject to the changing winds of a major economy, and there’s not much that you – personally – can do about it.

If you’re already trying your hand at property developing or are still at the point where you’re searching for new condos to pique your interest, then it’s worth having a plan in case the economy begins to show signs of strain. What do you do when prices are crashing but your entire business is built around making a profit off the sale of real estate?

Option One: You Wait It Out

The best property businesses have a contingency for this kind of scenario, in case of a delayed sale for any reason. It’s always a sensible way to structure your finances; if you plan for an immediate sale, then you are immediately vulnerable. It’s always wise to factor at least three months of extra expenses for running the house (such as the mortgage / taxation you may be liable for).

In the worst case scenario with the national economy however, you might find yourself waiting for a lot more than three months. Waiting this out is probably the wisest move, but that depends on you having the funds to do that. If you don’t, then it’s time to move on to…

Option Two: Sell and Run

Prices might be bad right now, but what if this is just the beginning of a downward slope? If the signs are bad, then it might be best to break your investment early and get out before things get even worse.

This might mean losing money, but what you need to figure is whether this move will stop you losing even more money in the future. If you suspect the blip is just a temporary problem, then this is an extreme course of action – but if the signs are that the economic problems are global, then it might be time to cash out.

Option Three: Proceed As Normal

Even when prices are down, people do still buy and sell houses. Any good property investments business will have a margin; obviously you want to make the most money as possible, but reducing your sale price (while still keeping a healthy profit margin) is something a well-structured business can survive.



Five Mistakes That Every Novice Property Developer Should Avoid


novice developerGetting started in the world of property development can be a daunting task. There are courses to take and lessons to learn, but much of what you’ll learn from property development comes from a mix of common sense, intuition, and experience. The property market is a volatile one that can change at any moment, so it’s important that you notice the signs of failure and when to pull out before it’s too late.

In order to give you a hand, here are five mistakes that almost every amateur property developers makes, and should try their best to avoid.

  1. Quantity over quality

This is a rather simple and straightforward tip. Don’t bite off more than you can chew, don’t assume that you’re going to be able to handle more than a single property sale at a time with your lack of experience.

Not only does it take a lot of coordination and time management skills to deal with multiple clients fighting over different houses, it also eats into your mental state and can easily stress you out. As a new property developer, you need to focus on making a quality sale in order to spread your name and perfect your sales skills.

  1. Replace terrible builders

If you’re renovating a property or building on new land, then don’t allow terrible builders to ruin your chances of making a sale. Builders are no strangers to charging you more money for a simple build or trying to dazzle you with their lingo.

Make sure you’re looking at online resources such as this brick guide to learn all about construction. A bit of time investment into the subject of construction can go a long way and help you identify builders who are legitimate and those who are trying to con you.

  1. Over Exaggerating

There are many things you can over exaggerate when it comes to the property market. Perhaps you write a brief article about your new development projects and overestimate the end results. Perhaps you install appliances and complicated decor arrangements in a house that look out of place.

Maybe you’re focusing too much on luxury when it’s an apartment that should be designed for low-income families. Whatever you do, set limits to your development projects and always design for the area your property is in, don’t go overboard trying to stand out.

  1. Stay professional

Don’t get too cute with your clients. When you’re showing them a property or speaking with them over the phone, don’t interject with personal comments. If your client makes a comment about something they dislike about the property, don’t say anything that could relate to your opinion.

Don’t tell them you agree, don’t tell them you disagree and don’t give them reasons for it. Stay professional, keep your distance from your client and answer their questions, not their opinions.

  1. Developing in the wrong area

If you’re going to invest a lot of money into the real estate market, then make sure your area of focus is a profitable one with a lot of traffic.

If you build in an area that is niche or doesn’t get many buyers and sellers, then you’re wasting your time and you’re better off investing your money into a new development project and renovating existing houses in popular areas.