Property Development: Choosing the Right Partners
It’s never been a better time to invest in property; low interest rates, growing demand for housing and the strengthening economy make property investment an attractive option for UK investors. However, whilst real estate is generally considered a safe bet for an investment portfolio, property development can be risky territory.
Here, we explore the importance of choosing the right working partners when embarking on a property development project, and how to find a property investment company you can trust.
Property investment opportunities can look attractive at first, but those forecasts and valuations are all dependent on the people responsible for developing the building itself. Poor workmanship by tradesmen and hiccups with the schedule and budget can cause havoc for stakeholders, even impacting the final return on investment. For this reason, it’s crucial to find out who is in charge of managing the property development before you invest. The project managers should have the relevant experience, accreditation and insurance to deliver workmanship to a high standard, and should thoroughly vet every subcontractor, to prevent any issues arising during construction.
Your Future in Their Hands However, completing the project on time and within budget isn’t enough for many investments. Particularly in the commercial and leisure sector, you need to know that your partners can deliver on projections when it comes to generating revenue and adding value to your portfolio.
To this end, do some digging on your potential partners. Do they have a proven track record in the industry? For example, one of our hotel room investment projects, Whndham Halcyon Retreat Golf and Spa Resort, is operated and managed by Wyndham Group. As the largest hotel group in the world, this gives our investors confidence that their finances are secure, and that the projected net returns will come to fruition.
Even the most accomplished partners aren’t perfect, and your own situation can change significantly over the space of a few years. This makes establishing your position and terms from the start essential if you want to avoid any headaches or confrontations later down the line. Do they offer flexible investment options, and buyback assurances in case you want to rethink your portfolio in a few years? Have an open and upfront conversation with either your potential partners or investment company before you commit to investing, to ensure that you feel comfortable with their plans for the property.
Smart investment decisions go beyond analysing the project itself; it’s crucial to evaluate your potential partners too. From finding a reliable property investment company to doing some research on the firms managing the development itself, follow these tips to get it right first time when investing in property.
Want to find out more about IQ Property Investment and our partners? Browse our website or give us a call on 0330 100 2505 to speak with an advisor.