While costing for any venture one must make sure that both direct and indirect costs be taken into consideration. One needs to take care of all the costs as the budget needs to kept under control at any costs lest one finds in the middle of the execution of the project that the spending has exceeded much above the budget that was kept aside. This particular scenario will surely go against the project and may even force the developer to close the project feels Brian Linnekens.
According to Brian Linnekens of Gidevelopmentinc being aware of all the costs involved while executing a project will surely work in making the project a success in the long run. Keeping costs under control is as important as the execution of the project itself. The two kinds of costs involved in the execution of any project are the direct and indirect costs. Direct costs involve the land acquisition costs, engineering costs, construction costs and marketing costs. Whereas indirect costs involve the fee of attorneys, accountants, and other professional services that you avail while executing the project.
Before even planning for a property development project one need to do the feasibility study. Without a feasibility study it would be like groping in the dark without any knowledge of the path that needs to be taken to reach a particular destination. Feasibility study involves the analysis of the demand and competition along with the chances of the success of the project in he long run.
One should always be aware of the pitfalls that come in the way of a successful project execution. You need to check with your tax advisor about the type of entity that’s going to work fine for you. You need to decide if you are going to build a corporation, LLC, individually, partnership firm that’s going to execute the project. Environmental issues need to be taken care of n advance as these issues can be quite risky if they are not tackled in the very beginning. Both the phases in the environmental issues need to be addressed in the very beginning.
You need to keep the delivery time at a time when you are very sure that the final touches will be given to the project and you are in a comfortable position to deliver the property. Construction cost overruns need to be taken care and addressed as they crop up during the project execution. The pricing of the property needs to be done very carefully as the rates in real estate keep fluctuating thus you need to design the rates according to the current and future market trends.
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