Property development can be a very rewarding venture for any property owner today. The financial rewards can be extremely gratifying, and seeing a completed project can be greatly satisfying too. However, it is also an investment that can create upheaval and stress if it is not handled with enough organisation, care and attention.
This property development checklist highlights the main areas that you need to follow as a property developer, in order for your projects to flourish. So whether your development is large or small, complicated or seemingly simple, always bear in mind the following key steps for success:
Consider the Area
All good property developers understand the demographics, economy and real estate market in the area they invest in. When considering local demographics, try asking questions such as, "With increasing divorce rates and long life expectancy, which type of person would buy property here?" You should also consider the local economy: if businesses are starting up here, it is probably an up-and-coming place to build. It is also a must to ask local estate agents what the market is like, how much property sells for and who buys in the area.
Be Mindful of Legalities and Planning When planning your project, ensure that you ask the following important question:
* Are any specialist permissions required?
* Is planning permission needed?
* Is building control necessary?
* Are permitted development rights available?
By asking these initial questions, issues can be dealt with immediately rather than mid-way through the project and at much greater expense. Your solicitor should also check the title to your property. This is to make sure that there are no restrictive clauses or covenants that could stop you from carrying out your intended development work.
Have Suitable Finance in Place
Property development requires substantial financial support. Be sure you can cover all potential costs and overheads during your project. Many developers continue to work, managing smaller ventures during evenings and weekends. Others also decide to invest inheritance or gifted assets into their property development. Short-term loans and bridging finance can also help to secure developments and cover overheads while the building is underway.
Look into Local Utilities
Checking building utilities and local water supplies is highly important. Be sure that utility pipes and water supplies do not affect the area where the property will be built or converted. Piping, public mains or drains close to the property could prevent or significantly restrict your planned work. However, also be sure to understand where you will connect to the local utilities and if needed look at obtaining the necessary rights to work on third party land. Moreover, if local drains or building utilities are not up to scratch, they could prove very costly to repair. Therefore, it is always important to bear these issues in mind when finalising your budget.
Check the Property is Stable
Employ a property surveyor to check that everything is safe, stable and secure. Poor brickwork, severe damp and rotten joists are all problems you should be aware of. Floors should also be inspected closely. Poor-quality floorboards showing signs of damp should be replaced as soon as possible. In addition to this, windows should also receive your attention. Understanding the quality of the glass and surrounding wood will help you develop the property effectively.
Ensure Your Changes are Practical
Making just minor improvements to a property can make all the difference. Overhauling the decor can add a lot of value to a building. When changing the function of a building, always check that this is possible first. For example, is it possible to obtain planning permission for the project? Will the associated costs make the project feasible? Finally, to put all of your plans into practice you should consider including in your team: a quantity surveyor, an architect, an engineer, a project manager, and an estate agent to sell the final build.
Reading this article may lead you to have concerns about your future property development projects. It may seem as though hurdles could appear at any point, whether it be at the planning stage or when considering local utilities. However, each part of this checklist has been created to help novice developers grow and ultimately succeed. You should always remember: with careful planning and diligence at every step, your project could bring in significant profits and create a building that many will enjoy for years to come.
If you are currently developing properties within your portfolio, or would like some advice for the future, please contact your local Whitegates office today.
Disclaimer: Guest blog posts on the Whitegates blog are written by external companies. Whitegates do not endorse the products or services of these companies.