Contact us at : info @ reimag . co . za + 27 21 761 3848
Don ’ t be afraid to ask as many questions as you need to , especially the very hard ones , and don ’ t make any assumptions . Educate and empower yourself with as much information as possible .
My experience is that you will find a consistency in the answer to the questions you ask about the different aspects of property development . That should be your guideline and benchmark . If there is too much inconsistency and conflicting answers , you don ’ t have the answers yet . Keep asking and investigating - the devil is in the detail . Overlooking a simple aspect could cost you the success of the development . You want this to be your first development , not the last .
Start small
Don ’ t be in a hurry to dive into a 100-unit development that you think is going to be a home run and put you on the cover of a magazine . More often than not , this does not happen on your first development . Start off with something small and manageable , from a capital outlay as well as manageability perspective .
Making a mistake on a two-unit development is a lot more palatable than on a 100-unit development . Remember that the mistake is in multiples of the number of units you are developing . One small item overlooked , at a measly cost of R5000 multiplied by 100 , is all of a sudden not so small . But at two units , it ’ s difficult to swallow , but manageable . It becomes school fees paid , and not bankruptcy .
Market segment
Choose a market segment that you are familiar with . If you ’ ve been investing in affordable housing or student accommodation for years , don ’ t embark on an ultra luxury development as your first development .
Start off within a segment of the market that you already have knowledge in . Very often , first time developers make the mistake of venturing into a segment that they are not familiar with , and try to apply the principles of one segment in another . This is a recipe for disaster . Find a segment of property development where there ’ s insatiable demand , and consistently offer a product at a very specific price point . Once you ’ ve perfected developing in a specific segment , improve on your product offering , rinse and repeat .
Geographical area
Develop in an area that is situated close to you , or within an area that you are currently invested in . Property development has 20 times more moving parts to manage than managing an existing asset that only requires a bit of maintenance and rent collection .
Not only do you need to consistently be on top of the contractor and the construction process and all the trades and sub trades , but also the day-to-day overseeing of the progress , quality control , liaising and coordinating the professional team , managing the budget , and many unforeseen challenges on site , which almost always occur .
Having a development far from your location , can prove to be quite onerous and eventually an absolute nightmare when you have to commute for hours or board a flight just to get to site . Sometimes , site visits may be necessary more than once or twice a day .
The above can be summarised in one word : focus . Focus on knowledge , the market , product , demand , and geography .
Wishing you success on your property development journey .
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Contact us at : info @ reimag . co . za + 27 21 761 3848