As an Australian, there’s no wonder you have a penchant for real estate. Not that other forms of investment are comparatively less profitable, but this industry has always been just hale and hearty. The types of properties to invest in come in a large variety—each one brings something unique to the table. No matter where you want to put your money in real estate, however, you can’t afford not to conduct a thorough feasibility study. Even if you have a good nose for money-spinning ventures, you might not sense the possible pitfalls without a series of key analyses.
Vision One Projects shares a glimpse of what a feasible study can do for your real estate investment:
Risks vs. Rewards
First and foremost, the purpose of a feasibility study is to know the revenue potential of your real estate project. A gut feeling alone won’t do to forecast to measure to possible risks and rewards in developing a property in a certain location.
Timing, Timing, Timing
Experienced developers, of course, always based their research on actual numbers. They look at the current the pulse of the market, the trends that tell how the industry’s future might shape up and consider key factors that render a particular project would be profitable or not.
Sum all of them together, the study would paint a picture if the timing of your investment is perfect. Sometimes, even the promising ventures at face value wouldn’t bear fruit is the time is not ripe.
Two Words: Vacancy Rate
If you’re planning to rent out a property, which you might likely be, calculating this metric is paramount. A sound assumption of your vacancy rate shows your cash flow projection over a certain period.
Different unit developments in Perth, Sydney, Melbourne and other major cities, along with the suburbs, can have varying vacancy rates. Ignoring this metric is out of the question if you want to invest in the right property.
Property developers nowadays are willing to conduct a feasibility study at no cost. Instead of shouldering another cost, such free service is a welcome option any clever investor wouldn’t pass up.