5 Property Development Risks You Should Be Aware of

Property development

Property development is an exciting and challenging venture that needs to be considered very carefully. Both novices and experienced property developers face risks that they need to be aware of in order to avoid selling at a lost within a year!!

 

Planning:   failure to plan for change of circumstances that may force you to sell early and at a loss. Sit down and go over the major possible circumstance changes: what if you don’t find a tenant for several months? What if your property gets damaged by the tenant or other? Are you planning to have a first child or even a second? What if the interests rate rise? You will need to understand all the most likely “what ifs” and make a contingency plan to overcome them.

 

Cost:   property investment comes at serious costs, especially at the beginning. You need to understand and accept that by becoming a property developer you put yourself at risk to lose a portion or the totality of your investment!! So before you make the big jump, ensure that you can clearly state the merits of the property you are looking to investing over other properties or other types of investments.

 

Getting side-tracked:   you can easily get side-tracked by the fear on investing. Indeed, placing hundreds of thousands of dollars into a single investment is a very scary move to make. This fear can make you lose your ability to make strategically sound decisions about what, where and how to buy your investment property. If you want to become a property investor, you need to be ready to make the scary plunge or you will never gain from it.

 

Impatience: property investment is a long-term profit strategy and not an immediate gain!! Sometimes it takes years before the value actually of your asset starts going up and there might even be times where the value drops for a while. Impatience may make you take rash decisions and sell early at a loss when you should have waited several more years.

 

Naivety:   property investment is a constant learning process. There are many unscrupulous property dealers who will readily take advantage of novices investors, leaving you with debts and no prospects of profit. It is important to research everything there is available about property investment before taking the plunge. Don’t hesitate to contact Jennifer Kuehn for advice on property development and investment strategies.