Thinking about tackling your very first property development project can seem a daunting prospect. There are many things to think about and items often get overlooked. This guide will help you look at all of the important factors you will need to consider when making the choice to take on your first development project. It will also outline the possible pitfalls to look out for.

Read on to understand those key factors:

The Team Around You

It is really important that you surround yourself with a team that will work efficiently and effectively in helping you reach your goals, as that team can either make or break your project. They are the people who will help you on to take the project from its early stages up to completion and it is of critical importance that they are able to deliver the desired results.

You may reduce the risk of choosing a bad team by ensuring at the initial recruitment stage that you obtain details of previous experience and projects, that you also make use of online reviews as well as trying to talk to previous customers to see their views. If your proposed team are doing a fantastic job, they will usually be happy to demonstrate it by providing you with all of the information that you need to make an informed decision.

Any Similar Projects in the Region

If the demand for your type of project is strong, but yet a similar project is supposed to hit the market at around the same time, then this may make it harder for you to sell your project. This would be the case even if your development project is deemed stronger if your project is subject to delays. This is because your competitor project may reach the market prior to yours and this in turn would take a lot of buyers off the market.

It may be a good idea to phone some regional agents and ask them directly if they know of any other projects in the surrounding locations. There is a reasonable chance that they will be in the know about what may be hitting the market.

It’s A Numbers Game

The numbers are crucial. In order to successfully arrange finance, you need to make sure that the numbers add up.

Estate agents who act for the vendor are frequently asked to provide the best possible sale price for your chosen project. Try not to get caught up in a bidding war without going over your numbers carefully. It is important that you make sure the project will attain the profit margin you expect prior to making the offer.

It is usual for projects to be remarketed if buyers make an error in calculating the numbers. This in turn just leads to an unfortunate withdrawal of their deal once it is approved. This may damage their standing and might make future deals more difficult to secure.

The Project Site – Utility Services & Drains

Utility services and drains often get taken for granted by developers who have less experience. You may have to move the drains where they are found to be running through the centre of the project site and where usually your foundations are required. This may add substantial cost to your project.

Utility services can be problematic too. Make sure you understand just where everything is beneath the floor and that you can connect into it. If you do not address these significant issues from the outset, then you may find your costs spiralling out of control as it may be too late to do anything about it once these issues have been belatedly discovered.

What is the demand for your development project?

You need to ask the question of whether there is a strong demand for the quantity and type of units you are building? This is an important factor. Without adequate need, the value of the project site is insignificant.

Always make sure that the project site blends in with the surrounding region, will not suffer with any local ceiling prices pulling the price down and that comparable units are selling well.

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