Even where you might have a project planned with excellent prospects, one of the most important aspects of any project is selecting the right site. As any real estate developer knows, it’s all about location, location, location and selecting the wrong location can cost you.
One of the first points to consider is whether or not the land you choose is a good choice for the type of project you have planned. For instance, if you’re planning on building a multi-unit dwelling, consider how many units you can fit on the property. That can determine the quality of each unit and potential profit the property will yield.
Additionally, you’ll have to consider what types of units you’ll be creating. Of course, you’ll work with an architect or a general contractor, but, even before that stage, you should already have some idea of what type of property you want to build. Certainly, two or more bedrooms are nice for larger families, but most growing families turn to buying a home of their own. This is why most successful properties consist mostly of studio and one bedroom apartments. The good thing about efficiency apartments is that you can create more units of quality within a smaller area.
However, developers must each look at the market of the area in which they’re building. This means looking at current trends, as well as looking at how those trends might change by the time construction is complete. You might find a better opportunity for larger three or four bedroom units in the area, so building smaller units might actually harm your project.
Once you make these determinations, it’s time to get more specific in choosing a location that fits certain criteria. For instance, you want to be sure quality tenants will want to live in the area. Additionally, will it accommodate the number of units you anticipate without driving the construction costs up? You will also want to be sure that the cost of the land will fit into your budget.
To find your ideal site, you can work with other developers, real estate agents, and brokers, but also do your own research. You may find something that fits closer to your expectations by driving around in the neighborhoods where you would like to build. By wary of foreclosed or abandoned properties though. These may indicate problems that you might inherit along with the purchase. There may be environmental issues, zoning problems, or unreasonable landowners.
Once you find a suitable property, you can begin looking at the size of the property to determine how best to develop it. If there’s an existing building, can it be easily converted? If the property is vacant land, how many units can you anticipate fitting onto the property? You may need to adjust your original plans somewhat, depending on the characteristics of the property you’ve chosen.