Steps in Property Development
As we have already established, property development takes a lot of work and patience. Yes, there are perks especially because it doesn’t really require qualifications as I’ve mentioned in my last blog, and more importantly, it could generate huge profit. Building a property needs to have a lot of preparation, and at the same time you must be ready to take on various responsibilities especially if you’re just starting out.
There are steps in property development that are distinct and developers should follow in order to achieve the best results, however, the steps could change depending on the project and situation. Which is why flexibility is a trait all property developers should possess. In any endeavor, problems are normal, so it is important to be able to think fast.
Here are the most common steps that developers normally follow.
The first stage is obviously where you seek look for a land or an existing property that has potential to be developed into something that will generate amazing profit. During this stage, what is needed is to secure the funds for the purchase. Knowing your borrowing capacity should also be done during stage.
During the assessment stage, you need to take note of all the policies at your local council, including any documents that must be completed or submitted. This stage also includes developing a concept for your project. You may need to answer a few questions such as how big can you build in the site? How many units can you put there? What would be the restrictions?
You may also want to consider the neighbors and the character of the neighborhood.
Of course, it will always come down to the stage where you purchase the land or property you have sought out. You have to be sure that your purchase would allow you to make profit and not lose money.
You will need an architect to fulfill the planning. The architect will be the one to draw up plans while following guidelines, as well as what would fit in the state planning codes. After this, you will need to wait quite a while (up to 12 months) before getting that permit.
This stage includes documenting the working drawings after you have received approval. The architect and engineer would work together for you to obtain the building permit in order to begin the pre-construction. This would normally take about three to four months.
Pre-Construction & Construction
Pre-construction stage would mean getting quotes from builders and then after the bank loan is approved, only then will you be able to start building your project. This would be the construction stage. The building depends on how big your project is – normally, six to twelve months.
The last stage is when your project is complete. It could either be leased or sold.