To become a successful property developer, you must have a firm and thorough understanding of the property development process. Here, we walk you through the different steps involved ina typical property development project, from pre-purchase and conceptualization, all the way through to completion.
Step 1: Pre-Purchase
This is the first step in the property development process. It involves finding an established site or raw land that has sufficient potential for development. Knowing where to look and who to contact helps in this step.
Ideally, you should have your finances in place at the pre-purchase stage. If that’s not possible, you should at least have a clear idea of how much capital you can borrow from your bank or lender, so that you know what to look for.
Step 2: Conceptualization
Once you’ve identified a potential site for your project, the next step is to come up with a detailed development concept.
What can you put up on the land? How big can be your units? Are there any restrictions? To ascertain what you can build (and what you cannot build), you must review and assess the planning policies laid down by your local building council for your chosen allotment.
Step 3: Purchase
You’re armed with a site, a land value and a viable development concept. It’s now time to secure the site and close the deal.
Buying the land is the third step in the property development process. Your goal here is to negotiate the best possible deal for your project.
Step 4: AcquiringApproval for the Development
This is where you involve your architect and land surveyor. Together, they draw up plans that you then submit to your local building council to get approval for the development.
Step 5: Documenting the Working Drawings
Once you receive the permit from your local building council, your architect documents the working drawings. This is the fifth step in the property development process.
What’s the need for documenting the working drawings, you ask?
The documentation helps your builder understand what they need to build.
Step 6: Preconstruction
In this step, you acquire quotes from prospective builders and finalize the loan from your lender. Due diligence is important here.
Step 7: Construction
Now the actual construction starts.
The construction stage can take anywhere between seven and twelve months to complete, depending on the size of your project.
Step 8: Completion
After your project is completed, you either lease or sell it. Both strategies have their advantages. If you sell your project, you get all your returns in one go. If you decide to lease your project, you can add a valuable income stream to your investment portfolio and even borrow against it for future development projects.
This completes our walkthrough of the property development process. We hope you found the read informative and helpful.
About GCP Fund
GCP Fund is a leading national commercial lender headquartered in New York. The company provides a complete range of hard money loan products to real estate investors and businesses. For more details, please call 1-800-514-7350 or email at email@example.com.