Archive for March, 2010

Residential Property Development

29.03.2010
23:02
0

By M Deskins
Thanks to residential Property Development, there has been a vast improvement in the old, run down neighbourhoods in the UK. Professional property development organizations, such as the Neptune Group, improve buildings and properties so that they can attract residents. For instance, they can rebuild and remodel old commercial office buildings and turn them into residential units.

Residential property development did not become popular until around ten years ago, and now public interest is increasing every year. Because they are able to develop new residential homes, companies like the Neptune Group are helping improve conditions in UK communities all the time. Because property development companies work with the owners of old buildings and properties at low costs, they have the time and money to improve the conditions in order to make the properties more “liveable” and affordable for others to live in.

Not every use of a property can be changed though, which is why it’s important for residential property developers to be consulted first. They will analyze a building to see if it can be successfully changed and improved, and if it can, they will then come up with a detailed plan on how to change it. Some properties may only need minor improvements, while others will need to be wholly converted.

If someone is wanting to turn an old house into a flat, for instance (or vice versa), it would be wise for them to consult a residential property development company in order to know just exactly what it would cost and how much time it would take for a successful change. They will also be informed by the property developers if the investment will be worth it. Sometimes the costs and resources of turning a building into a flat will be much more expensive than any revenues ever earned through renting the units out.

Residential property development companies are the best bet for anyone wishing to renovate his or her property so that it can be as good as new. Residential property developers can convert both homes and old, commercial buildings into improved apartment units, thus helping with important factors like urban development.

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Raising Money For Property Development

28.03.2010
21:21
0

By Don Suter

In addition to finding the right property, one of the most difficult aspects of Property Development is being able to fund the purchase and re-development of the property before putting it back on the market.

Many would-be property developers have the skills and flair for property development, but lack the financial clout to put these into practice. So what are the options for funding a property development?

Property development mortgage

A good place to begin is to talk to your bank or building society about taking out a mortgage to fund the development, however most high street mortgage providers are not fully equipped to service the needs of property developers and are more likely to refuse finance.

A better bet would be to try one of the niche mortgage providers who specialise in providing finance to property investors and developers.

Mortgages provided by these companies are often repayable on an interest-only basis and in some cases it is possible to borrow up to 100% of the development cost, however the developer is often required to own the land on an unencumbered basis.

It is also worth noting, that as the risk increases to the lender, the interest rate on repayments will also increase.

Using other people’s money

A cheaper way of raising money may be to borrow from other people, such as friends, family or colleagues at work.

The core advantage is that you are less likely to be saddled with expensive interest rates, but it is important to keep all business dealings above board and well documented, as it is all too easy for relationships to go sour if problems occur with the development.

Seek private investors

Another approach that the savvy property developer might take is to ask people to invest in the development, so that they can enjoy a profitable return on the sale.

This removes much of the financial risk from the developer and means that money can be spent on business expenses and not repaying high-interest loans.

Whilst selling a stake in the development is an attractive idea, it does require a good level of marketing skills by the developer to find and convince potential investors to part with their money.

Start small

It is still possible to find low cost properties around the UK, which are much easier to finance, before working your way up to larger, more profitable developments. Growing your property development business in stages allows you to gain valuable experience, reduce your risks and helps you to build up cash reserves to invest in future developments.

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Property Development – Feasibility Studies

23.03.2010
21:47
0
By Bart S Pair :




A feasibility study is performed at many stages of development in order to analyze and determine whether the project is financially and environmentally worth developing. In the beginning the numbers are very general and conservative. By the time the project starts construction, the numbers should be quite accurate.

Usually a developer will conduct his first feasibility study after he has tied up the contract through a purchase and sale agreement or an option to buy. The study researches whether there is a demand for the proposed development project and present and future competition. A lot of the information can be obtained from local planning authorities. Based upon the results, if the demand projection indicates there is a higher demand than what is currently available, then the developer assumes the project will be successful and should proceed with the development.

Most feasibility studies take into consideration needs legal issues, technical issues, financial and economic concerns and benefits and cultural needs.

Property Due Diligence:

Once the developer has decided to move forward with the project, his engineer or architect will draw preliminary plans and specifications for the development. This would include the layout of the project, buildings, utilities, and other site work. The engineer along with the developer if he prefers would then meet with local zoning and planning authorities to determine if the site complies with local zoning ordinances or whether zoning changes will be needed. Zoning compliance is extremely crucial to the development process and should be reviewed and analyzed in the very beginning of the development process. If during this property due diligence period any major hurdles or concerns come up a new feasibility study should be immediately performed to determine if the project should move forward.

An engineer’s cost estimate for the site work along with an architect’s cost estimate for the building are prepared during the property due diligence period. The developer will take these cost projections and create a cash flow analysis of the project based on the timing of permitting, construction, and finally occupancy. The cash flow analysis is part of a much more detailed feasibility study created at this time.

Bank Approval and Financing:

The developer will then obtain a development mortgage loan financing commitment once the initial plans and specifications are completed and a fairly accurate cost for the project has been estimated. The lender will usually request a copy of the preliminary market feasibility study, proposed project description, financial statements and any information about other projects the developer has developed. Development loans customarily provide funds to pay for the purchasing the site, permitting costs and construction costs.


Final Property Feasibility Study:

After permits have been awarded for the project but prior to actual construction beginning, it is in the best interest of the developer to conduct one last feasibility analysis of the project. The development costs should be quite solid and need very little revision. It is the market and demand for such a project that most needs to be checked at this point. It can often be a long time between the first feasibility study and this one and economics and demographics can change.

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Property Development

20.03.2010
18:12
0

The role of real property development in economic growth and development is well acknowledged especially industrial, commercial and residential properties that are key catalysts to accelerated economic growth and development.
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