Guide to Reducing Property Development Costs
Property development is potentially one of the most rewarding undertakings. Budgeting and cost management is, of course, an important facet of large development projects. With good time management, a team of good advisers, and useful tool such as real estate development software, costs can be controlled to support the developer in meeting their financial goals.
Choosing the Right Development Site
Along with conceptualising a viable project design, choosing the development site is one of the important early steps for enhancing cost control of your development project.
To determine a fair price for the site, developers can conduct market research; investigate zoning issues, local market conditions and other development projects; and use tools such as property valuation software to determine the optimum price they would be willing to pay for the site to achieve their desired returns.
Expert advice from architects, surveyors, and planners can also help the developer decide whether the site is a viable and feasible location for their specific project.
Use Financial Modelling Software
Financial Modeling software, enable developers to envisage different outcomes based on variables driven by market conditions and changing costs of construction and development. As such, it can be a powerful tool in helping developers to anticipate such variations and adapt to them to control costs.
Getting technical advice from advisers such as engineers, accountants, or town planners and streamline the building application process, saving developers time and money. Advice on design, for example, can allow costs to be kept to a minimum without compromising on market appeal or quality.
All developers will prioritise the setting of realistic cash flow projections and conducting periodic budget review. Budget reviews are a means for tracking costs as the development project progresses, and ensuring that the project costs remain as planned without budget blow-outs. Timely budget reviews also support developers in tracking commitments such as loan repayments and construction costs.
The Approval Stage
The approval process plays an important role when it comes to reducing delays and getting the project completed on time. In this area, expert advice (such as that from town planners and solicitors) assists by getting the application for approval correct the first time around. A refusal can mean increased costs, while getting approved quickly eliminates unnecessary costs and delays.
Know-how and skills can contribute significantly to the cost viability of a project. Choosing an experienced team has a number of benefits. It allows the developer to delegate effectively; for example, to a skilled property development manager who assists with keeping the project moving according to the set timeline and budget.
Choosing an experience team also means that tasks are carried out correctly the first time around. It can also allow the development to respond and adjust quickly to any changes in regulations or market conditions, or to unforeseen situations.