It is true that real estate is one of the least risky investments. However, this does not mean that it presents no risk or that the outcome will certainly be positive. Therefore, a real estate project is supposed to be prepared, one does not simply go blindly trying to achieve success thanks to a stroke of luck.
You have to prepare properly, analyze the market, ensure that all the factors necessary for success are combined. The purpose of this careful analysis is to ensure the viability of the project. This is why the realization of a market study is necessary, especially for real estate developers to whom it allows, through useful information, to correctly apprehend all the outlines of the project.
These studies, if done well, have several advantages that we will talk about in this blog article.
Determine the type of project (commercial or residential)
In terms of residential real estate, this involves determining who is the target clientele and the standing of housing that is appropriate for the location of the project, while considering the criteria of the immediate environment (security and urban planning of the area), access to shops and supermarkets, distance from schools, which are concerns for households, potential customers of future housing.
Regarding commercial real estate, the targets are businesses and shops for office and / or retail use.
The realities are completely different, so are the goals and needs. Indeed, accessibility, proximity of the site to a main road, the area (preferably commercial), the availability of parking lots are important criteria to be considered in the context of a commercial / office project.
It is therefore important to understand the ins and outs in each of these cases.
The market study will make it possible to identify the type of project best suited to the area, to the demand, the costs linked to the realization of the project as well as all the relevant details in order to help the investor to make his decision depending on his situation and his objectives.
Determine the standing suited to the chosen location and investment budgets
To identify the standing suitable for the project, it is necessary to know the prices of the real estate market in the area you have chosen, the standard of living and comfort sought according to the reputation of the district and the level of comfort of the surrounding housing for a residential project, or shops / offices in the area for a commercial project.
Also, these data will enable better to adaptation of the cost of the project to its performance capacity.
Thus, a well-conducted market study will allow you to have essential information for the success of your real estate project.
Calculate investment costs
Carrying out a market study prior to the implementation of your real estate project will also be an opportunity for you to have a precise idea of the costs related to the realization of your project:
- Cost of land;
- Technical studies ;
- Architect and engineering firm (project outline and construction estimate);
- Promotion (marketing) and commercialization costs of the project once completed.
This will determine the feasibility of your project. Depending on this, you can also define the total budget and the financing method necessary for the realization of your project.
Calculate estimated income of sales and / or rentals of future properties
Before investing, one needs to have an idea of the return on investment. Measure the project’s profitability will allow you to know if your investment is profitable and to know the costs and revenues estimated in your study. For these amounts to be reliable and relevant, it is necessary that these various studies be carried out by professionals demonstrating solid experience and increased knowledge of the local real estate market, which, in Côte d’Ivoire, is constantly evolving and of which only the field agents know the intricacies.
Whether you are a company, a real estate developer, or a private investor interested in the real estate market, do not hesitate to contact us for qualified professional advice.
MAM Conseil carries out precise and reliable market studies considering all the complexity of the ivorian real estate market to ensure the success of your projects.
We hope that this article will be useful to you and that has enabled you to know a little more about the necessity of market studies in the realization of any real estate project.