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3 Essential Steps To Determine The Feasibility Of A Property Development Project
So, what is property development?
Is it a business? Or rather, order that make sure your business is worth pursuing for! And, for that a property development feasibility test is mandatory.
Before conducting any sort of construction project, a comprehensive feasibility analysis is essential to analyse whether the project is financially feasible and technically viable within the accumulated working capital.
But there are various forms or methods to conduct such feasibility analysis. In order to do that, you must follow a three step guideline, that will help you achieve your goal with minimum hassle!
Step 1: Conduct extensive market research
For any kind of building or construction project, it is crucial that you ensure the type of project that you actually want and, the available resources at that point of time. Furthermore property must appeal to your target clients and, must be within your investment range.
The first and foremost is to get familiar with the kind of neighbourhood you are dealing with. After that, check out the services and immunities that would entice your buyers to your proposed project.
It is an essential step of market research who are you approach a local real estate agent and survey the best selling areas in the neighbourhood. Also, take a detailed note of your property development feasibility study.
Step 2: Consult with a professional team of property development
Always keep in mind that, property development is not a one man show! you have to be a part of a team of special is an expert who will guide you through the entire feasibility process. Due diligence is required at every step of the way as a mistake from one part could cost you the entire project.
Some of the members of the team that you should consult with are:
Consult on the best structure to purchase as a property and to event the text implications while development of a project it is in your best wish to keep good faith with the property accountant.
Meaningless to say but still worth reminding – an architect is a crucial piece in the entire puzzle! So, build a rapport with him/her.
While you conduct a property development feasibility study, a solicitor will assist you to keep in check of all the restrictive covenants and ease the drafting process for you!
Real estate agents
They will help you to determine the value of your construction project and also make sure the rental returns are completed after the project commence.
Among others, there is the bank representative, surveyor along with other professionals who take an active part in successful implementation of your proposed project.
Step 3: It’s number crunch time!
While figuring out the profitability of your building project, it is essential to run the numbers as it is one of the core aspects of your feasibility study. Some of the aspects you should look into are –
Cost of construction
Professional and council fees
Purchase price of the project undertaken
Marketing and finance costs
Holding and additional costs
This is a crucial step in your property development feasibility test, put the best mastermind to figure out how much you can receive as expected returns!
It is advisable to consult with a professional planner to gauge the feasibility of your project from the very first step. Also, you would be getting the necessary assistance at every step of the way like, whether you have enough profit in the deal to move on with your project or back out.
This is all the information that you need to know as of now!
About the Author: If you would like to know more about the Property Development Feasibility then please take a moment to read the contributions made Adam Leworthy.
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