In recent years, popular HGTV shows like Property Brothers and Fixer Upper have inspired a new wave of amateur property developers to try their hand in the real estate industry. While it is easy to see why many people are drawn to this exciting, creative, and dynamic field, experience property developers recognize that property development can have its fair share of setbacks that can be both costly and time-consuming. Kyle Corkum, founder of LStar Ventures and experienced real estate developer, has taken note of this new wave of amateur property developers and hopes to share his knowledge with this new generation. Below, Kyle Corkum will discuss some of the most common mistakes made by new developers.
Failing to Accurately Estimate Development Costs
Oftentimes, inexperienced developers can underestimate the true cost of a project and believe they can complete a project on a budget. This can often be a costly mistake in the long run. After a project’s documentation and design have been completed and the true cost of building and labor have been calculated, amateur developers will often back out or shelve the project. When planning a project, it is essential to accurately estimate the project’s true cost to avoid wasted time and funds.
While it is always important to always reduce costs during a project, cutting corners and choosing cheap labor and materials can often cause additional problems and costs later in the project. Additionally, the quality of a project can greatly impact the final purchasing decision of buyers. It is not uncommon for developments to fail to sell because a developer has chosen to use the cheapest building materials available. New developers should aim to find cost-effective solutions rather than cheap materials or labor.
Developing a Property to Personal Tastes
One of the most common mistakes made by inexperienced developers is building or buying a property to an individual’s taste. While it is important to stand out on the market, building an individual’s dream home can tip the scales and make a property too specific for buyers looking to make a property theirs. A good and experienced architect should know how to find a middle ground between unique and individualistic when designing a property and increase the property’s appeal to the general public.