Developing a property typically means converting unused, vacant land for a residential or commercial purpose. In many cases, property development relates to commercial endeavors. Someone may want to build a multi-home community and sell the new homes to individual families. Others may want to create a commercial space, such as a new shopping center or even an industrial complex.
The actual real property acquired could be one of the biggest and most important investments a would-be developer can make. How can someone select the right parcel for development?
Analyze the local market
Whether an aspiring developer wants to build residential properties or a commercial facility, looking at what currently exists near a specific parcel could be of the utmost importance. Prospective developers need to look into not just what currently exists nearby but also any other large sales or projects in the early stages of development. For example, perhaps there will be too much competition for certain types of businesses, or maybe a recent uptick in residential property development nearby would reduce the asking price of the properties due to an influx of new housing units.
Look at the property carefully
Any specific property that someone considers for development purposes may have beneficial characteristics and aspects that make it less than ideal for development. In some cases, it could be zoning that is problematic. A parcel zoned for agricultural use, for example, would require a complex rezoning or variance process before someone could use it as they intend. Other times, factors about the property itself, such as its inclusion on flood maps, might make development more costly or deter some people from buying homes there due to the potential risk involved. Even factors like the presence of certain animals could lead to massive challenges in the future, as endangered species and songbirds could affect development plans.
Explore infrastructure nearby
The location of a parcel and the nature of nearby communities can directly influence whether or not a developer must to absorb certain expenses. From the proximity of water and sewer services to the state of local roads, there are many infrastructure requirements for different kinds of development. Oftentimes, developers have to absorb the cost of ensuring there will be water supply for buyers or tenants. They may also have to pay to run power lines to a new development.
The budget for a project, the timeline for development and even the ultimate purpose of the project can all influence whether or not a specific parcel might be the right choice for an aspiring developer. Having a thorough business plan and carefully evaluating each parcel can take some of the risk out of purchasing land for development in Florida.