New Property Development Project Checklist
You may be thinking about starting a new property development project and with that, there is quite a few things to think about. We heave headlined some of the key ares that we think you need to think about when starting a new property development project.
Outline your plans
It’s best to write a plan for your development project detailing target market, property type, timescale and costs. This will help you have a clear idea of your plans and if you need to present it to anyone such as an investor or lender, you have all the information that you need in one place.
Buy to let or Buy to Sell
You will need to decide what you would like to do with your property, whether to rent it out or sell it once you have finished. Buy to let will involve continuous maintenance and dealing with tenants however, it offers a long term income stream. Whilst buy to sell is a quicker way to build your property portfolio but can involve more work at once.
Market Research
It’s always best to research the location that you’re looking for your project to be located in. It’s good to know what there is to do there, transport links, work opportunities and what the demographic is for the area.
Whether you’re looking to sell or rent your property out, it’s always good to look at the market to see what people are looking for and how much properties are going for.
Calculating your Gross Development Value
The gross development value is an important number – this is your estimated end value and typically development finance loans are based upon the estimated end value. This also gives you and the lender an insight into the level of profit that can be made.
Financing your property development
There is a number of methods that can you finance your next property development such as cash, a mortgage, bridging loans and development finance are a few examples.
If you’re unsure what type of finance that you need, we suggest speaking to a commercial finance broker like ourselves. As experienced property finance specialists as well as property developers, we’ll discuss all the options that are available for you.
Documents for the Lenders
If you’re looking to go down the finance route, lenders will request documents to support your application. Some documents that they will ask for are project overview, asset and liability form, schedule of work and specifications and previous experience, however not limited to only these documents.
Renovating and Refurbishing your Property
Renovating a property for reselling or rental is important as poor quality finishes can be off putting for people, think about your target market and set yourself a budget for the work.
If you’re planning for your property to go on the rental market, you have the option to put it on unfurnished or furnished. If you’re thinking of furnishing your rental property, you have the option to get your furniture on lease finance.
The benefits of leasing your finance are that you retain capital, affordable monthly payments and payments can be claimed as a revenue expense which means it can be offset against corporation tax. If you’re interested in leasing your furniture, speak to our sister company Amplo Leasing who specialises in furniture leasing.
If you would like to discuss your development finance requirements or would like to ask us a question, don’t hesitate to get in touch with a member of our team. Call us on 01270 443510 or complete our enquiry form & we’ll be in touch with you as soon as possible.