Which has a press for new homes in the united kingdom, investors are looking at raw land for development. The acquisition period should include a detailed homework. Land Permitting Services

When investors look at raw land for its development potential, it can be an thrilling process. But part of that excitement often means moving fast when the ability is there – faster than the usual rivalling investor might be able to do. 

A factor that necessarily slows this process – to good effect – is credited diligence. This is the necessary probe into undetectable and potentially problematic features of the property. We all do not buy automobiles without a test drive and a thorough inspection of the car, inside and out. Similar can be said, writ large, on the acquisition of property.

The standard review of the due diligence process should include the following characteristics of the proposed land acquisition:

– Physical – Precisely what is topographically amenable to development, including subterranean barriers (rock that is difficult to dig deep into, for example), slope, wetland presence, archaeological features and potential toxic contamination? Likewise, a boundary survey has to establish these topographical features and if any buildings improperly encroach on others’ land.

– Legal – Besides evidently established name, any existing covenants, tutoriaux and rights-of-way should be uncovered in the credited diligence process. Zoning and site plan approvals also are critical and can sometimes be “deal breaking” considerations.

– Financial – Price and value of a property are not always the same thing. For the investor, it’s about buying low and offering high, so in the pre-purchase phase a reasonable look at both parts of the equation is crucial to the complete enterprise.

– Sustainability – Properties’ durability performance is about more than “doing the right thing, ” however that is still a fine motivator and the one which can favourably impact the close to future marketability of a property. Nonetheless it can also affect the property’s monetary performance in rental expansion, duration to let, fall and the time required to sell the property. Of note, residential and some commercial built properties place high values on sustainability features, while some “green” scenarios can be a poor fit with professional development.

– Sociable – How will this land transaction affect the surrounding community? And of equal importance but a slightly different question, how will the community understand it can easily affect them? Expansion always means change, and change typically meets amount of resistance. That said, advocates for affordable housing have found be advocates for development, alleviating the outsized demand with an increased resource, which tends to lower prices.

From there, the investor can examine exterior factors that determine the land’s potential investment performance. This may have little regarding the land in its current state and much more to do with external variables: the potential for use re-zoning (amenability to change on the part of local planning authorities), the market needs for housing, and the economical equations under which homebuilders in the area conduct their business. Land that cannot be re-zoned, developed and re-sold is not land that is attractive to most investors with mid-term goals (i. e., to recover their investment with progress in two to five years, for example).

Whilst formerly the province of single land developers, individuals with? 10, 000 or more are playing UK strategic land development within joint ventures. Consequently investment groups are coordinated by land development specialists, much of the risk is mitigated with a detailed knowledge of the industry – and using the due diligence process. The brand new investor in land should weigh such ventures within the risk structure of their full portfolio, ideally under advisement of an independent financial specialist.