Venturing into property development can seem like a cumbersome and daunting task, perhaps because it really is a grand challenge, but that shouldn’t worry you if you take the time to build a solid battle plan. Every experienced investor will tell you that in order to be successful at property development, you need to surround yourself with the right partners, organize your finances and obtain the necessary capital, and stick to project plan no matter what in order to complete the development process as scheduled. Now, let’s break all of this down and give you some quick tips that will allow you to conduct a successful property development project as a novice investor.
First and foremost, you need to find a way to fund the property development process from conception all the way to finalization, and the best way to obtain a stable source of capital is to apply for a property development loan. Now, this is not as easy as simply applying for a loan, because property development professionals need to prove to the lenders that they have a solid track record and a history of positive ROIs. With that in mind, you need to start working on your portfolio and enrich it with all past experiences pertaining to the industry.
In modern property development, location is one of the most important factors that you need to consider, as you need to find the ideal spot to build the property that will appeal to your exact target demographic. A straightforward example of a bad location would be to build a residential property in a business part of town, or to build any type of property anywhere without first researching the market projections for the region. You never know, perhaps the neighborhood is slowly turning into a business hub, so you should invest in a commercial property to appeal to the new business leaders.
One of the common mistakes that first-time property developers make is being on the wrong side of the law. If your goal is to conduct a successful property development project from start to finish, then you can’t afford to have any setbacks or delays due to a missing permit or an expired certification, or even worse, for the authorities to order you to cease construction altogether. Be sure to work with a team of legal professionals who can guarantee that you are compliant with all laws and regulations.
Since you will be working with contractors and various outside partners, you have to gather as many quotes as you can, and run thorough vetting processes in order to pick the best candidates. Don’t trust word of mouth only, instead, scrutinize everyone’s track record, and get in touch with their past clients as well.
Finally, always keep the needs of your target demographic in mind. To maximize the success of property development in this day and age, you need to optimize the property to the exact needs of the buyers, meaning that the generation of buyers you’re targeting need to gravitate towards the property naturally because of the functionality and ease of living that it provides.
As an aspiring property developer, you have a long and winding road ahead of you. That said, you can make your first property development project a success if you incorporate these tips into your business strategy.
Mike Johnston is an avid blogger and content writer with a focus in real estate, home improvement, and the construction industry.