Anyone who has read my eBook, followed my Instagram account or has ever spoken to me about property will know that I am a BIG believer in doing your research before diving into a new development. In fact, “Do Your Research” is practically my slogan. It is the first of my 6 Rs to property development.
However, if you haven’t read my eBook, you might be wondering, “Jerry, WHAT research are you referring to exactly?”
Let me lay it all out for you: Investors need to undertake research on every aspect of the market BEFORE purchasing a site so that correct allowances can be made and potential risks minimized.
You also need to do your due diligence by conducting thorough research on the property itself to ensure there are no costly post-investment surprises or unexpected set-backs to your success.
Some questions you should ask yourself to ensure you have all your bases covered include:
- What’s the maximum price you can afford for the site, and will you be able to afford to build when ready?
- What suburbs you are considering investing in and why?
- Are you investing through a partnership or individually?
- Are you entering the deal through a purchase option or buying outright?
- Will you be seeking money partners for the project?
- And most importantly, have you eliminated as many risks as possible prior to buying a specific property, for the desired outcome.
Thorough research means you can invest wisely, that you are investing in the right places, with the most favourable terms, and for the best possible return on investment.
It is simple to get hold of data on the property itself, planning regulations, similar property that have been developed or are under development sales prices and rental yields. That information is already out there, so you have no excuses for not taking advantage of it. Your profit margin depends on it!