Determining Your Property Development Feasibility
It’s no hidden truth that inadequate planning can be the downfall of large projects, and the reality of property development is no different. Just like any investment, there should be plenty of research going into the decision, and one way that you can best assess the possible success of your property development is through a property feasibility report. This step is integral to any project you’re looking at investing in.
What is a property feasibility report?
A feasibility report determines and predicts the opportunity of your potential investment, which can help you understand budget and establish the possible profits for the future. Your report should establish the overall success of the project, and help you decide whether it’s an investment you are confident in, or something that may have setbacks and issues that could slow any ROI down.
Why is a feasibility report necessary?
Of course planning ahead and weighing out your options is a good idea, but is it a necessary part of the process? Well, if you want to be fully prepared for the worst, we’d say it is. Here’s why:
– Property development feasibility software gives you a competitive advantage: This essentially helps you see if you are wasting time and money on a project that might not go anywhere. Software that weighs out the potential profit margins goes a long way when you’re starting a new project.
– Determine your finances in advance: A feasibility report means that there’s no surprise cost waiting for you. If you’re someone who wants to manage your investments well, a preliminary report gives you that foresight.
– Test and trial concepts before starting: A feasibility report is like testing the success of your project, but there are fewer risks to writing a test down in paper. You can much better lay your doubts down to rest this way.
What goes into a feasibility report?
An effective report will go into the details of all costs and expenses in the project. By investigating the region, historical data and potential partnerships necessary, you can build a strong case for your property. A few expenses include:
- Land purchase and acquisition
- Council contribution
- Utility fees and costs
- Marketing or selling
- Insurance costs
- Goods and services tax
- Construction costs
Application fees, insurance costs and costs of selling or marketing your property are all necessary elements to getting the most out of your development, and a feasibility report outlines all of these elements for your to navigate through. Your report should then help you better understand potential for income or profit, including:
- Rental income
- Gross sales
- Bonus/additional sources of income
A complete report should help you gauge the potential for any property development, but it’s also important to be aware that they may not always be an exact mirroring of the future success or failure of your project. However, it’s a fantastic way to determine necessary changes or look for risks before risks are in front of you.
Know your project potential
Archistar provides innovative property technology and generative design for developers, agents and architects to reduce risk and time in the property development process. This includes state-of-the-art development feasibility software that can save time, money and determine the value and opportunity of any project.
We partner with the world’s leading property minds so you can be confident in your decisions using trusted property data. Our feasibility reporting combines Nearmap, Domain, CoreLogic RP Data, Commercial Real Estate & Cordell Development data in one streamlined subscription, so you get insights from all of the experts.
Planning doesn’t have to give you a headache. Archistar can help you reduce costs, minimise the number of platforms and processes you use and save you time. Get started with Archistar today.