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By Abiodun Doherty

Property development has attracted the attention of many investors in recent years. The reason is not farfetched. Many investors have heard of property developers who have made or are making fantastic profits from building and selling residential or commercial properties.

While this is definitely true, the stories often fail to include many property developers that have gone or almost gone bankrupt. We can learn from the two groups. The truth is that smart developers often have some common practices that seem to be fundamental to their success. If you are considering making some money from property development, you need to pay close attention to projects that succeeded or failed and why they did.

Some of the back-end issues that often determine the profitability or otherwise of a property development project include the terms and conditions of the stakeholders. A developer must not commit to delivering a project at a cost that is unrealistic. Barring significant unforeseen circumstances, the project costing must be realistic with a provision for contingencies and inflation. The project timeline must be carefully and professionally calculated. Project finance and the cost of the funds must be reasonable. If these foundational issues are properly settled, the project has a reasonable chance of success.

Success, they say, leaves clues. Many successful projects have designs that take care of six salient issues that can wow a buyer or put them off if not well addressed. These issues do not have equal importance but do matter. From experience and research, when buyers enter into a property for an inspection, they are subconsciously influenced by these factors to a greater or lesser degree. In addition, the importance of these factors depends on the nature of the project and the location.

A commercial development has different consideration when compared with a residential development. Locations where land is very costly often require more economical designs that maximise the use of the land. But whatever the case may be, there are basic ways of taking care of some of these issues.

The sizes of the master bedroom and the kitchen are very important. Smart developers give extra thought to the design and the amenities of these sections of the building. Many buyers consider their bedroom as the most private area of their home and expect basic luxuries there. It is standard to ensure that the master bedroom is ensuite. A little thoughtfulness and creativity regarding the wardrobe section will be appreciated.

The bathroom should be carefully and creatively designed to make it attractive. The same rule applies to the kitchen area. Smart developers know that most property purchase decisions are significantly influenced by women and the kitchen seems to be their first consideration when evaluating a property.

Once a woman finds the kitchen area attractive, she is more open to buying the property.

Lighting and ventilation are other key elements when evaluating a property. It amazes me when I inspect a property in the daytime and the whole place is dark. A well-designed property should allow enough natural light into the building to allow for ease of movement within the property without the need to turn on the bulbs during the daytime. This also connects to ventilation or the proper location of windows and vents to allow for free flow of air in and out of the property.

Another selling point is the parking and the green area of a property. Every occupier of the property is concerned about where their car is parked. A car is one of the major purchases that people make and they are often concerned about the security of their car. An exclusive parking area for every occupant if the building is an apartment is a must.

Every property should have ample space for at least two cars. Smart developers also leave at least a little space for a green area. A green area has an aesthetic and health appeal. It is an instant attraction once you approach a property.

Finally, a flexible payment plan is always appreciated by interested buyers. This does not necessarily have to be a mortgage.

Most developers begin the marketing of their project even before the ground breaking ceremony primarily because of the need to stimulate cash flow with off-plan purchases.

A partial commitment to a property by the buyer will reduce the need for borrowed funds which come at a higher cost to the developer. This also builds and creates momentum. People like to buy into projects that others have bought into. A feeling of scarcity and not wanting to miss out on an opportunity often spurs greater interest in the property.

* Doherty, a Lagos based real estate analyst, can be reached on abiodundoherty@yahoo.com