When it comes to what to invest your money in, you should run the most exclusive club in town – only the best get in. Whether you’ve been involved in property development for some time or you’re just starting out, any potential purchase needs to be put through the ringer. As an experienced investor, I still start with the exact pre-purchase assessment I’m sharing with you here. To determine if the property you’re considering is a good investment, use this cheat sheet.
Properties have different zoning categories, and if you want to build an apartment building, you don’t want to purchase a commercial site. Make sure the zoning matches your vision.
Is the site big enough for your project? Is it flat? Does it have the frontage you need? Are there fire or flooding risks? Each answer to these questions can either make the property a great buy or will send up red flags to take note of.
Take a look at the market where the property you’re interested in is located. What’s already being built there? What are the average costs of building in this area? If the property is in an upscale neighbourhood, are they going to want or allow an apartment complex? What is the projected value of your end product? Don’t guess – do your research now or suffer expensive consequences later.
How are you going to fund the property? If you’re looking to get a loan, many come with restrictions on what you can buy or build. Are you able to negotiate the price or terms of the loan and purchase? Is there an opportunity to team up with another investor?
To determine if the investment is a good one, you need to estimate all costs and projected profits. Determine the maximum amount you can spend on the purchase itself, and then on the construction or updating projects. Have a clear goal in mind, whether you are developing the property to sell or you are planning to hold on to it for leasing or renting opportunities.
Before you buy, have a series of professional reports created. You can choose to have a traffic or noise report done. Environmental, geological, and mining reports are all great choices to analyse the land itself. Include these with your market analysis to make the best-informed decision on any property.
To be successful in property investment, you need a great team. Partner with a real estate attorney, an accountant, an insurance agent, and a broker to start with. As you work through the development process, you’ll meet people you want to keep working with. Cover all your bases and find an expert for each step of the process.
Knowing what to look for in a development property is the key to making wise property investments. I’ve been in this business for a long time and have enjoyed success. There is a future for you in property investment if you approach it the right way. Contact me to discuss your interest in developing property – make us part of your dream team! You can also subscribe to my blog and follow Adpen on social media to get more helpful tips and secrets of the trade. Don’t put off investing in property. Learn what you need to know and subscribe today!
Next blog: How To Spot A Bad Investment (before it’s too late!)