Property Development Feasibility Studies
Property development feasibility studies are performed at various stages of property and land development projects. The main purpose of these studies is to analyze and decide whether the project is financially worth developing.
The first time you perform this study, the numbers involved are usually general and ‘ball-park’, but as you complete more and more of them you get to know the real numbes and they become more and more precise. Property development feasibility studies analyze the strengths and weaknesses of a development opportunity. Threats in the environment, like economic instability, can also be discovered with the help of a “Feaso”.
Property development feasibility studies are extremely useful when you want a general idea of the labor, material and time needed for the project to be completed. You can then rationalize as to whether the project will meet your needs.
Lastly, the probability of success of a project is demonstrated by a feasibility study. This way you will know if the property development will be rewarding in terms of finances to you or your organization.
Property development feasibility studies are especially helpful because they force you to pause and think about all aspects of the project. It helps get insights into things that are often overlooked.
The five main areas that are taken into consideration while completing a comprehensive feasibility study include:
- Technical
The technical aspect details the material, resources, transport and labor involved.
- Legal
The legal aspect considers all the legal requirements and if they are viable in terms of the company.
- Scheduling
The scheduling outlines whether deadlines can be met without the works quality being sacrificed.
- Economic
The economic aspect studies the value of the project in potential terms. The main point here being, the advantages of the project should outweigh the cost.
- Operational
Finally, the operational section analyses the organizational structure and systems of the company that is constructing or developing the property.
After reviewing and analysing all of the above, it is onlythis point that an informed conclusion can be reached about whether or not the project under consideration should be completed.
