PART TWO: Know your customer, make the sales!
Knowing your customer from the outset in any property deal is paramount. As such, creating an ‘avatar’ so you can envisage who will buy your type of property is the most important first step. This will essentially allow you to design the properties to suit the customer and will give the architects a brief they desperately need. Bear in mind that if you are building different styles or sizes with different price brackets, there may be several avatars you need to create.
I understand the local authority and planners have a large say but building the right property in the right location is paramount – and if you can’t, I'd probably walk away from the deal. I have all too often seen large family houses built on main roads or small apartments built in a downsizer market and all the other weird combinations that do not work in that location (and the developer wants top price) and guess what? You’ve got it! We have property that cannot sell for the correct £/sqft value and this will immediately hit the bottom line both in overpaying for finance and reducing your GDV. Nothing is impossible and everything will sell for a price, however, the time and expense it will take will only hit the bottom line, and who wants to go to all the trouble to not make or worse, lose money? Of course, I understand that there is no ‘perfect’ development, but if properties are priced correctly, then expectations can be managed, and bottom lines maintained.
So, a simple yet vital (and often forgotten!) first step. Get to know your customer and then get to know your property – and not the other way round and I believe that if you get this right, you and your property development are onto a good thing.