Posted by BillW. on March 15, 2001 at 06:51:23:
Here are a few questions you’ll need ansers to before you should proceed.
Do you have experience developing new rental property?
Are you able to do a market analysis of your area to determine if your anticipated project has a good chance of being fully occupied?
Do you have a lender in place to fund this project?
Do you have a good contractor with a track record of building these type projects on time and on budget?
Will your small community be able to absorb this new building?
Will your small community allow this amount of new building? Many don’t want rentals and will fight you.
Are the older units you are planning on buying also in the same community?
Have you done a cash flow analysis on each deal to see if the deal is worth doing? If so, are the returns worth the risks to you?
Have you analyzed your market to see if what you’re proposing on building is atually what the renters want?
Once you know these answers, you’ll be in a better position to make final decisions.