Mistakes to avoid as a property developer

avoid making these mistakes as a property developer

Common mistakes in property development and how to avoid them 

Becoming a property developer comes with a lot of responsibility. Although many boast that property development can be straightforward, it takes time and practice.

So many developers make the same mistakes over and over again. We are here to help you be different from the rest.

Our list of common mistakes and how to avoid them will hopefully help you soar as a property developer, maximise your profitability, and do your job right.

1. You begin a project without a clear or in-depth strategy

Many new property developers will fall into the trap of being tempted by a discount or believing someone who tells them that a property will go up in value.

This is a mistake because this will cloud your judgement and will restrict you from achieving your original ambitions for the property you are developing.


  • Ensure you have a clear and detailed strategy before buying a property.
  • Ensure that you have considered property development finance options or the way you will fund this project.
  • Your plan should also include an exit strategy. Read more.

2. You don’t consider the location

This is one of the easiest and most fatal mistakes to make is to disregard the location.

Many property developers are tempted by the size of a plot, or the quality of a property. However, location is a predominant factor which will increase the GDV of your project.


Consider location as a central part of your project plan.

Make sure that you factor in:

  • Transport links
  • Educational and professional establishments
  • Infrastructure
  • Amenities
  • Centrality

3. You don’t consider every cost

Don’t be tempted or distracted by headline figures about potential capital growth or gross yield.

Make sure that you factor in all kinds of costs: surveys and buying reports, buying, development, and management costs, along with your property development finance options, before you commit to buying. Learn more. 

4. You purchase a buy-to-let that has a negative yield

If you are becoming a property developer to make a passive income through a buy-to-let, you should avoid purchasing a property that will cost you monthly.

This means that you must consider the following costs:

  • Maintenance costs
  • Management costs
  • Rises in interest rates

5. You forget to consider opportunity costs

If you forget about the opportunity costs, this is a critical mistake.

Many developers hop on the property bandwagon because they want the opportunity to make money, however before leaping to conclusions, make sure to gain a full understanding of the opportunity costs so that you can fully maximise your profits.

6. You disregard cash flow and its importance

It would be best if you ALWAYS considered cash when running a business of any kind. Property development is a business, so you should centralise the importance of your cash flow.

Make sure to document how much you are bringing in, and how much you are paying each month.

Keep up with your finance repayments, too. Keeping detailed accounts of each incoming and outgoing payment will allow you to keep on top of your finances so that money doesn’t get lost or you forget to pay.

Always remember to seek professional advice when beginning your property development. 


Previous Article
Next Article