Securing the success of a property development project requires careful attention to several critical areas, all of which are equally important.
These areas include:
- project management
- town planning
Although finance is typically the last item on this list to be secured, it is a critical aspect of the project. It can have a significant influence on the other elements of the project. Therefore, it is crucial to get involved with financing relatively early in the project cycle, potentially even before the town planning permit (or DA if you are in NSW or Qld) is issued.
As a meticulous developer, you should have a clear idea early on of what you are proposing to build:
- how much it will cost to build, what your strategy is at the end of construction,
- what the end value of the project is likely to be, what the selling strategy is going to be, and
- who you are going to market to.
If you can answer these questions, you may be ready to speak to an advisor about how finances will likely look.
A detailed feasibility analysis is generally required to obtain value from working through the figures. Still, the accuracy of this analysis depends on the work that has gone into verifying the statistics and ensuring that you have made correct assumptions. This is usually straightforward for experienced developers, but you may need assistance putting the numbers together if you have yet to complete many projects. Building your team is a crucial step in this case, as having trusted consultants work through the figures with you will help you ensure their accuracy. Property development is a significant undertaking involving risk, so you need to ensure that it is worth pursuing before you proceed.
Once you have confirmed that the project is worth pursuing, it's time for you to consider your finance options and potential pricing.
Over the next six months, we will be sharing with you the Five-Step Bank Bypass System. It is a simple and effective system that helps you obtain the best funding for your project in line with your goals most efficiently. If you would like a sneak peek of next month's addition, please click the link below.