For those who don’t know what developing a property entails, the real development process to them is just buying a property (land or building), improving it, and selling it, and that’s all! But, truly, there’s more to this list of actions when it comes to developing a property.
Once you learn more about becoming a real estate developer and understand the pros and cons of property development, you’ll realise that real estate development is a bit more complex than you had thought.
So, do you want to learn what steps successful property developers follow when developing a property? Here are 7 steps they take to help them complete a development project from start to finish.
Steps in Developing a Property
- Know the ‘Why’
Experienced property developers know that the picture of what you want your property to look like is not the place to start when considering developing a property. They know that the first step to beginning the development of a property is to determine the answer to the obvious “why.”
Why are you developing the property? Do you want to create rental returns with it and increase your capital growth, or do you just want to make a once-off tidy profit from it?
Whatever your reason, it will provide you with guidance on how to proceed. Your future decisions about the development would also be premised on your reasons.
- Select a Development Path
Once you have determined your reason for developing the property, you need to also decide what path you want to take to actualize it. Are you doing a ground-up development or redevelopment?
If you choose a ground-up development, then you’ll need a suitable parcel of land for your development because you’ll be building from scratch. But if your choice is redevelopment, looking for land would not be necessary. You’ll only need to purchase a property that needs remodelling.
- Purchase the Development Property
As previously stated, for ground-up development, you need a suitable site where your development would be located. If you already have one, then you can skip this part. But if you don’t, there are some things you should consider before you buy.
What is the budget for the land? Do you have the personal financial capacity to buy, or would you need a loan? If you require a loan facility, are you aware of the nitty-gritty of obtaining one? The answers to these questions and several more pieces of information will help you to know the best way to acquire the land you need for development.
For a redevelopment project, you can scout out nearly dilapidated houses on well-positioned properties and acquire them to improve them.
But bear in mind that, whether you are undertaking a ground-up development or a redevelopment, it’s advisable that you seek professional advice or, at the very least, have someone knowledgeable with you throughout the buying process. It could be a development manager, a real estate consultant, a property lawyer, an architect, a surveyor, a town planner, an engineer, or an estate agent to ensure you are making the right decisions at every turn and getting value for your money.
- Perform Due Diligence
Again, this is where you need the expertise of any of the property development professionals mentioned earlier. Why? because conducting pre-purchase due diligence is critical to having a successful property development project. Plus, with the assistance of any of these professionals, there is little chance of buying a bad site or one with complications.
They can help you with the search, or direct you to where to look to find the right site for your development. They can also help you understand the potential risks and profit of your chosen property. A ground-up development or not, it’s important you do your due diligence before purchasing any property.
- Design, plan and obtain all necessary permissions
After purchasing your property for development, this is the very next thing you should do before developing a property. Whether you are building from scratch or just remodelling, you need to get the necessary permissions before you begin construction.
If you are looking to redevelop an existing property, you need to obtain a renovation permit before you can remodel the property. But if you are building from scratch, you’ll need a building permit instead.
Here’s what you need to obtain a building permit in Nigeria:
- A complete architectural drawing of your site that provides the following information (site plan, floor plan, roof plan, sections, elevations for all cardinal directions, schedules, and sanitary details
- A survey plan that provides the following information (name of the rightful owner; well-detailed location of the land; the area of the land; boundaries of the land; beacons; bearing; the survey plan number; the name, address, signature, and seal of the registered surveyor; and a stamp showing “free from acquisition”)
- A structural drawing showing detailed calculations of the proposed building
- A letter of structural stability from a COREN-certified engineer.
- Tax clearance and title documents
With these documents, you can start your application for a building permit. To get these documents done and ready, you will most definitely need the services of an architect, a land surveyor, and a structural engineer, respectively.
- Begin Construction
Once you get the approval to commence construction, you can start building. But first, there must be a series of conversations to establish what your expectations are. It is necessary to do this so that the builders know what is expected of them.
In these conversations, everyone can get clarity about the scope of work and then you can get a quote on what it would take to make that development project a reality. With all of these out of the way, construction can then go on as expected.
- Rent or Sell
Remember how we said you need to know your “why” before developing a property? We were speaking about this.
If you had wanted to develop the property because you wished to create rental returns with it, then your choice now on the issue of whether to sell or rent will be no deal. Since you want rental returns, you should rent out your developed property. But, if you just want to make a once-off tidy profit from it, then your choice should be to sell.
Have you had a change of heart? No worries. You can speak to a real estate marketing agency to advise you on the best way to earn property from your developed property.
Do you feel overwhelmed already after looking through these steps? Perhaps you should consider a joint venture partnership when developing a property or turn over your development project to a reputable real estate development company. This way, you still get to have your property developed.
At James Cubitt Developments (JCD), we develop buildings that are more than a structure but an expression of personalities. We are a leading real estate development company that you can trust to help you improve your pieces of real estate to increase their value and meet your space needs.
Whether you are looking to build new structures or modify your existing ones, we bring our experience and expertise to work to help you create a satisfactory project. Let’s help you convert your building ideas to real property. For more information:
Phone number: +234 1 715 9995, +234 1 715 9996