Budgets are there to be blown if the aspiring developers on Channel 4'sProperty Ladder are to be believed. Costs seem to spiral quickly out ofcontrol long before the work is finished. While it doesn't seem to concern the novice developers too much - ever confident that any extra additions will result in a higher selling price - presenter Sarah Beeny can often be seen trying to suppress the growing look of alarm on her face as projects get ever more expensive.

So it's not surprising when she says that the most common mistake among novice developers is that they don't work out their finances properly. "They underestimate how much money it is going to cost," she says. "They are completely unrealistic about how much it will cost and they forget lots of things.

"I think what people do is they think £10,000 is a lot of money to spend on a holiday so therefore it will be enough. Yes, £10,000 is a lot of money but it is not a lot of money to spend on a house."

A more realistic budget for developing a standard one bedroomed flat is, says Sarah, between £35,000 and £40,000. It sounds a lot but she points out that this includes all the costs of the project including borrowing money, and the legal fees for buying and selling the property and the cost of moving, as well as the building work and decorating.

"If I was buying a one bedroomed house that needed refurbishing that is how much I would spend," she says. "Underestimating the cost of the work is probably the worst mistake - and underestimating how much time it takes. It either costs more time or more money - you can't do it in no time or with no money." A standard development might include major building works such as a new roof, rewiring, plastering, a new kitchen and bathroom as well as the decorating. So how long should you realistically allow for the work to be done?

"If you develop a three bedroomed house it would be a 12 week development," says Sarah. "A smaller house - a one bedroomed property - would be about eight weeks. "This is with having workmen in. You can do it in less but that would be working every hour that God sends. Having spent many years working weekends and late into the night I know you get to the point where you have got to live.

"Also if you are working flat out you can start making mistakes. Often you get so on top of it that you can't work out what you are doing and you need to stand back. If you keep it to nine to five - or eight to six - you are often more productive than if you keep going. "Now people pay too much in the first place so they have to try and do some of the work themselves and they are cutting corners in every way - they are cutting corners in time and money." Getting into property developing has become increasingly popular in the last few years as people look on it as an easy way to make money relatively quickly, or as an escape from the nine to five. But it means that it is also getting harder to find good properties to develop that will result in a healthy profit.

"People want to develop and there is not enough supply and too much demand," says Sarah. But she still believes there is money to be made out of developing, if you approach the project in a businesslike way. "There is always money to be made from property if you do it right. Simply buying an unmodernised house is not going to make you rich. "You should look at the price, you should look at the resale price, the cost of the work - and see if there is profit in it. "It doesn't matter what the house is like if you are developing. It either does or does not make money - if it does buy it, if it doesn't, don't buy it. You have to do the sums first."

Location - as every budding developer has been told - is of supreme importance as it sets the value of a property (even a spacious house in pristine condition will have a ceiling price on it depending on where it is located). Position is just as important as location, she says. If you want to invest in a particular area and your budget is stretched, then it's cheaper to buy a property beside a railway line or on a main road. "I don't think that is a bad thing," says Sarah. "You just have to bear in mind that when you come to sell it you will sell it for less. Don't be fooled into thinking it doesn't matter - if it is, say, priced at £30,000 or £40,000 less than the one that isn't backing on to a railway line then you will sell it. If you try to sell it for the same amount, then you won't." Her other mantra is advising new developers not to get too personally involved in a project. Often people get carried away with the appearance of a house that they either spend too much money on the cosmetics - or they go for a strong look that they love, but which might put off potential buyers. Instead you have to think about the type of person that you are trying to sell to, and make sure that the property offers them what they are looking for - both in terms of facilities and also in décor.

So if you were trying to sell to a family you would need to have a garden, preferably off-street parking and an equal balance of living space to bedrooms. A large kitchen is also a must. "Ideally you want to have a kitchen big enough to live in because that is how we live nowadays, you cook while the kids are around the table."

Young professional singles or couples want quite different things. They will be looking for excellent transport links and a low maintenance property. But she also says it is important to go for that "wow" factor to draw them in. "Nowadays if you have a good job and you're splashing out on your first flat you quite want to impress your friends a bit. So I think if you are going for the young professional market, you need to have something about the property that is really quite impressive.

"It is nice to have it looking swanky. You want careful detailing, clever use of finishes to create a very contemporary, up-to-date look. You want to be fashionable."

Developers who are going for the buy-to-let market should keep the look simple and - when it comes to furnishings - buy cheaper beds and sofas and replace them regularly so they look fresh. "People who are renting will always prefer new things than old good quality things."

But it's important to get the basics right before getting carried away with the décor. "Don't try and cut corners on the major jobs and deal with the cosmetics. The cosmetics only matter when you have a sound skeleton. You need a sound roof, you need sound wiring and plumbing and walls that aren't damp and then you can worry about the cosmetics involved.

"I think a lot of people are more interested in fluffing up the interiors. Developing is not about putting pretty colours everywhere. There is an element of design involved, and you need to design it well. It is about people’s lifestyles and creating a solid, sound structure for someone to set up a home in."