Where to Look for Land
Land acquisition is a multi-year undertaking. It requires time and research to find suitable land, navigate municipal requirements, assemble a team of professionals, structure a deal, begin due diligence, get the required approvals, close, get permits, have contractors ready, and finally, find financing.
In the quest for finding land to build on, you need to take a close look at the different indicators needed to make good acquisition decisions. Key among them are population growth, income, the existing rental universe, average rents, and the prevalence of the key renter groups. There are many other indicators, but these are the most important.
As a basic rule of thumb, develop in a community with strong historic and projected population growth. Even though many consultants and brokers put an emphasis on major markets, significant opportunities are also available in secondary markets.
When you compare land prices in small towns to larger municipalities and communities, land prices are typically lower. Because smaller municipalities have a lower volume of development applications, the approvals process can be much faster. Also, because the municipality typically hasn’t seen the kind of interest in development that larger communities have seen, the municipality may be willing to work with you more intimately to try and find a financial solution to help you with the development process.
In the search to identify appropriate communities in which to consider acquiring land, we not only should consider population growth, but also study the age profiles of the various communities.
Existing Rental Universe
When trying to assess whether a community is suitable for an opportunity to buy land or for rental development in general, find out what the rental properties currently exists.
There are many ways to do this, such as searching real estate development websites for any new developments and searching municipal development websites for information.
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