Have you ever wondered what goes into the business of property development? With the profit potential in straight flipping property on the downturn, many would be developers are looking into investing time, money, and effort into adding value to properties in a bid to turn a healthier profit. Whether you are looking to develop property yourself or you are currently considering selling your property to a developer, you might be interested in this glimpse into the business.
The first step in buying a piece of property for development is making a thorough assessment of the financial implications of the purchase. Would be developers will have to find out the value of the property and how much similar properties in the community are going for. Sellers and developers should also estimate how much the property will be worth after the development work is completed. Finally, the cost of the entire project should be determined. These steps will help determine the feasibility of a particular piece of property for development.
Determining hidden development costs
Potential developers should definitely inspect the property beforehand in order to determine whether or not there are other expenses to consider. Properties sold for development often have structural problems that will only be apparent with close scrutiny. If it turns out that the building needs considerably more work than initially thought, its value might be nowhere near the initial estimate.
Adding value to the property
There are many ways to add value to a piece of property, from making it more functional or energy efficient, to addressing certain aspects specific to the needs of a particular community, such as parking, for example. If you are looking to get into property development, it is essential to be able to figure out what will add value to a particular piece of property.