This post is part of our CREST investment series, explaining the 5 things investors should consider when evaluating an investment opportunity.
What do we mean by an ‘investment timetable’?
A timetable is literally ‘a detailed plan showing when events or activities will happen’ – Cambridge English Dictionary
As you might expect, an investment timetable essentially lays out exactly what is expected to happen and when in terms of your investment. You need to have a clear idea of this before working with any property developer.
What does this mean in terms of property investment?
As a property development investor, you need to have a clear outline of when the following will happen:
- investor money in
- work starts (demolition/construction/renovation etc)
- work finishes
- homes put on the market
- homes sold
- investor receives return on investment
An example of a property development timetable
Let’s consider a typical development project timetable.
The overall investment period of a development project is the time between the initial investment and the time the investment (and expected returns) is paid back. This can be anything from 12 months to 36 months and is typically 18-24 months in duration.
During the investment period
Firstly, the time period between the initial investment and the start of construction works is usually 3 – 12 months. During this time, the developer’s team finalises the architectural and engineering design, then gets into contract with their chosen contractor, either through direct negotiation or via a tender process.
Secondly, the construction period will be between 9 – 15 months depending on the size, scale, and complexity of the project.
Thirdly, sales of the developed properties will begin towards the end of construction and continue after the properties are complete. A number of factors will influence the duration of the post-completion sales period, most importantly:
- the number of units developed
- the affordability and desirability of the finished product
- wider macro-economic factors
Finally, the investor will typically get their money back (and their expected return) after one of 3 scenarios.
- all the developed properties have been sold
- all the developed properties are rented out
- the developer has refinanced the development
It is VITAL you understand which of these scenarios applies to the development in which you are investing.
Changes to investment timetable and communication
It is important to have realistic expectations when investing in property. Property development, like any other industry, has variables which are subject to change and revision, and influences beyond direct control. Unfortunately, delays can and DO happen. Therefore you should allow for a little ‘wiggle room’. On the flip side, a development sometimes finishes ahead of schedule!
Because of this, communication is absolutely KEY. Your developer should always keep you fully up to date with progress and explain any potential or actual project delays.
At Watermark Homes, we provide our investors with regular and frequent updates via email and online webinars. These updates include:
- the latest changes on site (including photos and videos)
- the lastest discussions we have had with our project team or with the local planning authority or council
- any updates to the timeline
Likewise, we facilitate site visits and are always available to answer any questions that our investors have.
You can read our investors’ testimonials here.
Contact us to learn how you can invest in property with us (and ask to be added to our exclusive investment opportunity email group).