Some common mistakes made by first-time developers
Subdiving and developing a property can be tricky process for a first-timer, and even small mistakes can be costly.
Not only do you need to have the analytical and project management skills to identify and management the development of properties, you also need to be able to deal proactively with a range of stakeholders that all have their own motivations and obligations.
Not doing your homework when purchasing a development block is a recipe for disaster.
It can be easy to find a big block of land at a great price, in a suburb that may be conducive to subdivision. However, would-be investors often get caught up in the moment and put in offers without checking some critical factors.
All these factors could not only increase the cost base of subdividing by tens of thousands of cedis each, but also make subdividing impossible in some cases.
It’s risky to assume you can develop a property without adequately researching local municipal requirements.
How would you feel after your investment has been developed that would returned you a profit of $100,000? You’d be pretty happy, right? Buy what if I told you that you could have made $170,000, if you just had a little more information about the property’s true potential?
Get expert advice from an architect and builder on what could be built on the site. Their input and some creativity could make a huge difference to your profit. They will also be able to help with planning and design requirements.
Before you make plans or engage a builder, make sure you have finance in place. Speak to your bank or financier to work out if you have the required income to service any loan.
It can be time-consuming getting your finance scenarios as concrete as possible before investing in a site, but it can save you months of wasted time and tens of thousands of cedis.
The processes, laws, and regulations in the development space are changing so often and we prove confusing and frustrating for many first timers. A mentor who has done it before can advise you quickly on some of the frequent questions you’ll have about issues like design codes or the building process.
This can save you a lot of time, and therefore money.