Choosing A Location For Your Property Development Project
When it comes to making the right decision for your property development project, it pays to consider the various factors and weighing up your options. There are various cost implications that you may not have yet even considered when undertaking your property development process. Time is money, and no more so when it comes to property development.
The longer your development takes, the more your holding costs. So its vital for any development project investor to consider the following factors:
The local environment
There are numerous factors that can affect the costs of your general works when building a new home. For example, locations that might have clay or limestone in the earth, or established areas with grass or tree root matter embedded in the building area will add additional costs to your project as they will need to be removed or planned for. You can prepare yourself upfront by obtaining an engineer’s report on the soil classification. This report will outline the building requirements required to construct on the site and therefore any cost implications it may have on your project.
Get The Right Reports
In most cases a survey and engineer’s report will give the builder enough information to then give you accurate costs on your development or investment. This small outlay upfront will assist you in deciding on what direction to take and if you haven’t already purchased the land, may impact on your decision to actually move forward with this site. Similar to the way a building inspector will inspect an established building pre-purchase, it’s imperative that your block of land gets the once over by someone qualified to tell you what you are getting into.
Choose Your Design Wisely
Knowing what type of property you intend to end up with can also assist you in choosing a location. If your goal is to build an investment property, capital growth and occupancy rates for tenancies in your chosen area will be important information you need to know upfront. Do your homework and check statistics from the real estate association in your state. Some areas are better suited for long term investments while others are ideal for a speculative investor who will sell the product at the end of construction.
Do Your Research
A speculative investment involves more risk as you are working on the basis you can buy the land, develop the site and then sell the end product for a profit. It may surprise you that professional investors are able to make profits in all market conditions. If this is your first time in the speculative market, don’t fool yourself into thinking that you can emulate a professional’s results; they have done their research and already learnt from their past investments.
Location, Location, Location, Location
When undertaking an investment build for long term wealth generation, location will make a major impact on your success, especially on a multi-unit development. Looking at council plans, public works projects and commercial developments in your targeted areas will give you some idea of the potential population spread, and thus an idea of demand for your type of build. Matching the correct building product and a level of finish are key elements to a successful project, make sure your design fits in with the local elements and established town.
Successful outcomes for property development projects are usually the result of market research and creating the correct product for that market place. Working with the correct type of builder and sales consultant plays a major factor in your project as they are your partners from start to finish.
The best advice is to ensure you have made all necessary enquiries prior to making a firm offer on the property, and you are fully aware of the cost impacts for your project. Talk with professionals who have experience in these matters so you can make informed decisions on how best to move forward.
Video: Property Development in WA success story
Ventura iD and Multi Living Developments offer a free consultation service so you can see if developing is an option for you. Call (08) 9241 1600.