Do you want to develop the land yourself and sell lots directly? Do you wish to partner with a developer on a pay per lot basis? There are different ways to approach a development and most of the time your capital will determine which direction you go.
Things to Consider Before Developing:
- How many lots can I fit?
Some developers will work to capitalize on every lot possible and the end result is smaller lots and more density. Other developers choose to include trails, parks, larger lot sizes, and more flexibility. Depending on market conditions, surrounding competition, and supply/demand you will have to make that call. Smaller lots will be less expensive and should sell quicker based on price point. Larger lots will be more expensive and could take longer to sell. Some buyers will want 3 car garages and others will be okay with a 2 car garage.
- Should I have CCRS in place?
Many homeowners have a sour taste for CCR's and home owners associations. As a developer you want to maintain a certain integrity and in order to enforce the rules, you will need to develop CCR's and an HOA. When you have half of a neighborhood full and one of the home owners decides to park a car in the street for 3 months, you will need rules that allow you to clean that up.
In order to put in lots you will need to provide power, sewer and water. These utilities cost money to tap into and sometimes you will need to pay to bring them in. The capacity of the current lines will need to be adequate for your new development. You might also have to pay impact fees for each lot/house that is built and you will want to check on that.
- Do you have the time?
Developing is a full time job for many. If you are thinking about doing it part time, ask a professional for advice. There is great opportunity in developing real estate and there is also great risk. Make sure you have all of the information before you begin.
If you have property and you want information on whether you can develop it or not, call us today!
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