Developing property has tons of benefits, and is a great way to maximise the value of a plot of land. However, it isn’t for everybody, and a lot of unseasoned investors end up making crucial mistakes that could make it difficult for them to get a solid return on investment. The worst thing is that many of these mistakes could easily be avoided if investors did their homework first. Here are some of the most important things you should consider when buying land for development.
Approach the Property the Way the Buyer Would
When you’re considering buying land, approach it the way a home builder or home buyer would. The ideal plot should be flat and square. The property value is then the price per square foot multiplied by the size of the property. Subtract a penalty for everything from an irregular shape or slope. If you have to cross someone else’s property to reach it, that’s going to turn off most potential buyers.
Another factor to consider is utilities. Water is essential. Can you easily connect a new building to existing utilities? Or do you have to build a well? Don’t expect most people to buy a home where you’ll have to collect rainwater. Then there’s electricity. If you’re building a remote cabin, people may put up with generators or solar panels on the roof, but few will buy a cabin without any utilities at all.
Consider Working with a Specialist
Another thing you should do is talk with a property specialist. An advisor will be able to give you more information about a particular market, and help you know whether a piece of land is the right choice for you. This is especially true if you’re going to build something like commercial real estate.
This is also important if you’re thinking of investing in a market you aren’t familiar with and that is already very crowded and competitive. If you were looking at something in the London area for instance, only London property experts will be able to advise you. They’ll be able to find great opportunities and give you advice based on real market data and analysis. They’ll also be able to help you manage your portfolio and assist with property management. Not only that, but they’ll even be able to help you find tenants, deal with drafting leases, help with lease related disputes, and help you sell your property if you decide to go that way.
Understand the Impact of the Local Climate
They say that the most important thing about real estate is the location. When it comes to land purchasing, climate is almost as important a factor.
Consider the impact of local climate on the property. That lovely creek on the back side of the property may flood every year or two if the area is subject to heavy rains. What other extreme weather conditions would affect the ability to live there comfortably? For example, is the area at risk if the area periodically sees brush fires? And how will you mitigate that risk?
So, if you were thinking of investing in land, make sure that you follow these instructions first. And consider working with someone with boots on the ground and extensive knowledge of the market you’re interested in before you make a decision.