For Property Developers, choosing the right property to purchase is essential to ensuring that a sustainable profit can be made, and for many property developers, there are a wide array of criteria that need to be met in order for a property to even be considered for purchase.
But do you know some of the factors that might prevent you as a property developer from purchasing a property?
Location:
For many property developers, location is one of the main things they look for in a property. As you wouldn’t build a block of flats in the countryside.
Properties that are in more central locations commonly have a higher value than those further away from the centre of towns and cities. However, it’s not just the centrality of a property that a buyer takes into account, it’s also transport links, demographics, supply & demand mix for properties and is the location going through regeneration, growth, stagnation or decline phase.
The reputation of an area can make or break a buyer’s decision to purchase a property, with areas that have a negative reputation with locals appearing off-putting for buyers as it can make selling the property difficult due to lack of interest. On the other hand, areas that are looked upon fondly by locals are viewed as optimal properties for buyers – with developers able to generate a steady profit from these properties.
Price:
It goes without saying that for anyone purchasing a property – the price of the property is always the first and most important thing that we take into consideration. So, regardless of whether you are purchasing your first home, or purchasing a property for investment or development – the price will always have an effect.
For property developers, the price of the property is the biggest aspect that will make a property worth purchasing. A developer will always look at the price of a property, as it is essential that they can make a healthy profit from their developments – a property with an expensive market price can make developments unworthwhile due to tight profit margins, which don’t provide any fluctuation in market conditions, cost of materials & labour and delays.
The price of a property can be affected by a variety of elements, however, the main reasons for a property to have a higher market value is when demand out stripes supply.
Condition:
The condition of a property is a defining factor as to whether a buyer goes through with their offer. Properties that are in a poor condition can be hard to salvage for developers – with the work they need to do sometimes costing more than the potential profit they could make on the property, making their time and efforts unworthwhile.
Other elements such as ground conditions, structural integrity of the building, access restrictions, ground contamination, clean title, access for utilities, planning, green belt, conservation areas, listed buildings. All of which can lead to obtaining finance challenging when the condition is very poor.
How Can We Help You With Your Developments?
When you’re ready to purchase a site or proceed with a build, the last thing you want to hear is that your bank is inflexible.
But unlike your bank, we’re not restricted by certain unbending criteria. Instead, as experienced private lenders, we can finance your developments with a flexible short or long-term loan.
So, if you are looking to secure the funds you need to begin your next project, we’d love to hear from you.