There is a right way and a wrong way to purchase “control” land before you actually exchange the funds. This is crucial, critical to your developments success! You need to have this information to use in your feasibility study to determine the viability of the project. Once you have ‘control’ of the land, (which we will show you how to do with no risk of losing money or no money down) you need to be able to determine what you can build on this land which is determined by the appropriate governmental bodies in your area. You would already have a very good idea of this by following my guidelines for doing your market research. But unfortunately, sometimes the area size is not enough to be able to accurately determine how many ‘units’ can be build on this land. Your architect will have to accurately determine this for you. This is quite a simple process for the architect and than you will have to move onto obtaining a Development Approval. This is something True Developers do very early in the process. By doing this they are in effect minimising their risk at the earliest stage of the development.
So in the above mentioned article, I wrote how you don’t buy land first!!!! You do your research to determine the land’s ‘development capacity’ and once this is achieved as mentioned above, and you know for sure that you can development X units on this block that cost you X dollars, therefore providing yourself with the land cost per unit, you are able to set about lodging the appropriate forms with the governing body to obtain Development Approval. This is your number one aim. With out it say good bye to your development and your research and your hard work that you did to get to this position. It is important to follow the step by step process for making your development application ‘rejection proof’. There is some detail to doing this, but a briefly, you must first study the building development regulations within your ‘patch’, you must study the building development forms, you must have copies and studied your zoning maps and building height regulations, and you must know what you want to build! Once you have this under control, you must have plans detailed to lodge with your application to the local authorities stating what you plan to build. There are several item that need to be considered here as well, such as:
* Land boundaries and the relationship between them and Building set backs.
* The land area/gross building floor area ratio.
* Unit number/visitor car parks required on the land ratio.
* Car access to and from the site from the road.
And many more other issues that need to be taken into account. This is what determines how viable your project will be. So, getting back to the initial question of its viability, so if you do not know that you can build the amount of ‘units’ on the block of land you have hopefully not purchased, but have ‘control’ of, you will not know its viability and therefore you are setting yourself up for going broke!!!
You need this information to determine how much you have paid for the land per unit, as these and many more issues determine the financial feasibility of the development.
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