If you are planning to undertake a regeneration project or a large building, you will have to focus on certain crucial funding decisions. Selecting a property development finance company and making the right choices for your project is an important step that you can’t ignore. You can grab the property investment opportunities in South Africa under such circumstances. Check out this blog to learn more.
Property Development Finance: An Overview
Property development finance typically refers to large-scale funding or building renovation works and extensive building projects. This can consist of office block construction, new residential housing projects, or expansive regeneration initiatives. However, you can’t use property development finance for smaller projects where property improvement or home renovations are involved.
Learn About the Uses of Development Finance?
Development finance usually has three primary uses that include:
- Ground-up development
- Development of existing project
- Knockdown and rebuild
What Are the Types of Property Development Finance?
Since these finance options are tailored to suit the needs and requirements of specific projects, you can get confused in the middle of the process, wondering which type you are supposed to pursue. Check out some of the types of available property development finance stated below:
- Auction Finance
If you are willing to purchase an auctioned property, you can go for auction finance. In most cases, you need to pay your bids within a limited time period, like up to 28 days or so. If you want to receive higher levels of finance within a restricted time, auction finance is the best option.
- Commercial Mortgages
You can use commercial mortgages as property development finance in order to purchase specific properties such as shops, offices, and industrial units. If you are not buying a private residential property, you can choose a commercial mortgage to serve the purpose. They are the simplest and easiest funding methods.
- Bridging Finance
Bridging finance is a short-term funding option that has the potential to bridge the gap between purchasing a property and securing finance for it. These types of finance options tend to last for a few months or so.
What Is the Property Development Finance
Application Checklist?
You will have to provide certain answers and figures for a broad range of financial questions and projects that will be asked by your finance provider. Take a quick look at the checklist stated below:
- Purchase price
- Expected end value (GDV)
- Total build cost
- Full costing breakdown
- Contingency plan
- Property development CV
- Clear timescales along with possible or expected contingencies
- Planning permission, including restrictions
- Potential yield of the project
- Building regulations
The Bottom Line
The property investment companies in South Africa can help you with the process. Their years of experience in this field will generate desired results.
