Real Estate Development – Why You Shouldn’t Search For Great Property Development Sites

We have seen so many beginning property developers go badly wrong at the very first step.

Before scouring the real estate listings to find large blocks of land for sale, there is a crucial first step. If you jump into buying a site without taking this crucial first step, you are taking a huge risk.

You see, there is no way that you can be an expert in every part of your city or state. Yet, to be truly successful as a real estate developer, you must become an expert in the area in which you develop.

Each local council is different. Each area has different public transport provision, traffic bottlenecks, noise pollution issues, local resident action groups, and any one of a dozen other differences – and all these differences are vital factors in your development site viability calculation.

We advise that you don’t begin by searching for sites – but rather begin by selecting one or two area’s in which you will specialize.

When we’re looking for an area, we’re after “a desirable location with consistently good growth”. In other words, we’re after an area that historically has had a minimum annual average growth of at least 10%.

The growth of an area is normally associated with supply and demand more commonly known as the “scarcity” factor. But that’s by no means the end of the story. We have identified over 30 ‘Factors That Can Influence Real Estate Capital Growth’ – here are just some that we consider:

– consistent median house price increases

– positive population growth

– high socio-economic suburbs

– high percentage of homeowners

– low unemployment

– good transport links

Once we’ve identified an area we undertake a detailed market analysis of the neighbourhood using our ‘RED Local Market Feasibility Checklist’. Here are just some of the things we assess:

– demographics: Who is our market and what do they want?

– facilities: Are there schools, transport, shopping centres, hospitals, etc?

– gentrification: Is the suburb in transition, are people moving into the area, are people renovating, is there a café society, is it a beach suburb etc?

– infrastructure: Are there plans for new infrastructure like bypasses, new roads, new bridges, shopping centers or is council undertaking beautification?

Finally, we identify what the town planning regulations allow. Possibly even speaking to the local council planners directly – in our experience most council staff are very willing to help.

Never overlook the importance of proper research because it helps you to determine what type of dwelling is in high demand in a particular area, for example if you should be concentrating on townhouses or boutique apartment developments.

Once you have selected two or three locations which look good on paper, get familiar with the areas by driving around the suburbs, checking out what other developers are building, and then talking to a few Real Estate Agents and Property Managers. If possible, you should also attend property auctions. You want to get a feeling for what’s possible, and the demand in the area.

Only when you are completely satisfied that an area stacks up, in the statistics, the ease of doing business, and in the general atmosphere, should you start the process of looking at individual development sites to purchase.

Don’t get distracted by the “Bright Shiny Object” – the apparently brilliant bargain buy in an area you haven’t researched. You have no idea what problems you may be buying into! Stick with the area you know, and know well, and you will have a lower-risk real estate development experience.

Great Home Interior Design Ideas for those on a Budget

Who does not want a lovely home with beautiful decors and wonderful interiors? Perhaps only a hermit would want to keep his dwelling as austere as possible. You, on the other hand, would want to keep your place nice and charming – very conducive for living. Unfortunately, a lot of people are afraid of updating their interior design because of the dreaded costs of redecorating their living space. However, this is not actually true because there are many great ideas that could help you beautify your room without you having to sacrifice your budget.

Here are some great home interior design ideas that you may follow if you want to rev up a room that has been having the same look for ages.

– Reorganize your furniture. By changing the positions of your furniture, your room can achieve an entirely new look. Try changing the angles of fixtures or pulling them away from where they are now to update the dimension and look of the room.

– Paint your walls. Paint can come quite cheaply nowadays, and you can totally change the look of a room by painting the walls. You can make the change so radical, that it would really become a great transformation. You may even just some accents like straight lines, or stencil patterns to enhance the appearance of boring walls. You will be surprised as to how great the possibilities can be.

– Let Mother Nature in. You can freshen up any room by bringing plants. This can also help freshen the air as well as plants are known to filter the atmosphere. If you do not have time to take care of plants, then you could have artificial leaves and flowers. Having a touch of green makes the room so much pleasing to the eyes.

– Add a simple rug. Area rugs can create a soft touch in a room. A rug can add a piece for the eye to look at, making a very boring room more interesting to look at. Look for brilliant colors that still complement the motif of the room for that jazzy accentuation.

– Hang mixed frames on your wall. A picture frame collage could spice up any naked wall. Picture frames also add a sense of coziness and warmth especially if they contain photos of your loved ones.

– Change bathroom fixtures and fittings. You do not really have to remodel your entire bathroom to achieve a new look. You can just change the faucets or the flush handles, you can add some vanity lights or mirrors, and you would witness a dramatic change in your bathroom.

– Add new lamps. Bringing in light to any room adds warmth and a glowing presence that can make a gloomy room become full of life. Use interesting shades if you want something trendy.

– Replace the pulls and knobs of your closets. Just like with bathrooms, you do not really have to change fixtures to change a room’s look. Just change the handles and knobs of your cabinets and you can totally transform the entire room. You could go modern and use chrome or stainless steel; you may also go classic by installing brass or bronze.

– If you have the budget, install new wallpaper. Just like, paint, wallpapers can really update the look of your room. Nothing is crisper than a newly wallpapered wall. If you do not have enough money to wallpaper the entire room, you can just put wall paper borders to add interesting accents to your living space.

Decorating your home need not be expensive. With these great home interior design ideas, you can make your house as good as new.

How Property Fund Investors Can Fare Better Than Real Estate Developers

Are real estate developers disadvantaged relative to property fund investors?

Most real assets are performing better than the volatile stock market. But for some, property funds hold greater attraction over developed real estate.

Since the financial crisis of 2008, investors have soured on traditional investments due to factors of poor performance. Instead, they’re turning toward alternatives that include land investments and property funds. The reasons for this are easily understood: The growing housing shortage in the UK portends good near- and mid-term value growth for all aspects of residential real estate, particularly in light of robust (7 per cent since 2001) population growth.

Of course, not all real estate is the same for investors. Within real estate are two distinctly different types of investments, built properties and raw land. Some investors choose built properties or to invest in the developer who is managing the construction and sale of homes and commercial structures. An option to that is raw land, ripe for plan rezoning from, say, agricultural to residential-designated land.

Both have their merits, of course. But land investment might hold the advantage for at least three reasons:

• Adaptability to market needs – Raw land can be converted (pending approval of Local Planning Authority approvals, of course) to the use that is most critical to the local economy. This flexibility allows the land investment fund to prepare parcels for what will be needed in a relatively short period of time. On already-built property, investors have only what is there unless circumstances allow for the extraordinary expense of demolition and rebuilding – which only rarely makes sense from an asset growth perspective.

• Less investment in development (and associated risks) – The boom-bust cycles of the past several decades remind us of how a billion Pounds can be squandered rather quickly when a large property comes online at the precise moment when no one wants it. See “Canary Wharf, Olympia & York” for a spectacular illustration of how badly property investments can fail.

• More liquidity (but still not volatile) – Perhaps the Achilles Heel of real land assets is the illiquidity of land, with or without property. But land investments that at most involve the light infrastructure required of residential neighbourhoods (roads, sewers and other utilities) are much more easily sold than property involving structures. While that pales in comparison to real estate investment trusts for liquidity, real property is not nearly as subject to market fluctuations as are REITs.

To be sure, both investors in property funds and land investments tend to achieve asset growth in well-managed situations. But from land to property development, the path is quicker. With a seasoned team of land investment professionals, a joint venture partnership can identify and manage properties for maximum value appreciation and resale between 18 months and five years after acquisition.

All investments carry risk and should be considered in relation to one’s full portfolio of financial instruments. Be sure to contact a personal financial consultant before embarking on any investment.