Choosing Between Commercial And Residential Land Development
Developing a piece of land that you own is a very personal and far-reaching decision. With the right choices, you can maximum the value of the land for life. And with the wrong choices, you can do just the opposite. For these reasons, it is critical that you take the time to ponder the best way forward before making up your mind. A great starting point is deciding whether to go the residential or commercial route. Below, find out how the two options compare.
Cost of development
First, you have to think about cost as this will determine what your development capacity is. Overall, commercial builds cost much more than residential ones. This is because they are usually larger and require more planning. They often require huge cash reservoirs from long-term savings, investors, or bank financing. If you are feeling constrained for cash, residential developments might be more comfortable for you.
As a potential developer, you also should evaluate just how much difficulty you are willing to bear in your quest to develop. This way, you know what you're getting yourself into right from the start. Residential builds are quite straightforward. Once you have your planning approved, you just need to follow up with your home builder until the project is complete. With commercial builds, however, a lot could go wrong. There are the planning regulations, financing concerns, labour, build time, environmental concerns, and many other factors. In fact, while you can handle a residential build by yourself, with a commercial development, you need consultants to help guide you along.
Commercial builds have more development options, tons of them actually. There are schools, clinics, commercial stores, office spaces, restaurants, workshops, and lots of other options. Each has their own budgets so you have a larger playing field to work with. With residential builds, you can either build your main home or a secondary home. If renting or selling, you can build multi-dwelling units or granny flats.
The financial returns of your build depend on the size and the particular niche you have taken on. Generally, commercial developments rake in more income because commercial spaces cost more per square foot. However, luxury houses or multi-dwelling units can sometimes earn just as much if not more. In your particular case, your budget and the location of the land should guide you to evaluate which option offers better returns.
For best results consult professionals such as property consultants, estate agents, valuers, property developers or property managers in the area. They can provide you with in-depth insights that will help you put your land and your cash to the best use.