Property Investment through the Lens of a Construction Manager

Coming all the way from the renaissance, real estate has been one of the industries that has continued to evolve. We have seen the rise of property moguls and wealthy men going bankrupt. One budget miscalculation when buying a home and the doors to hell are knocking, with the right leverage you walk to the bank smiling. Join me as we break down the intricacies of the property market, what does it entail? Is it only for the rich?

The property market goes beyond the for sale sign, beyond the listings, it encompasses the entire lifecycle of a property; from land acquisition and feasibility studies to planning, design, construction and operation. The final product you see, that's simply part of an ecosystem. Here's the catch, the hidden decisions are often the determinants of whether a property becomes an asset or a liability.

A construction manager evaluates the process that created the product. While most people look at the location , finishes and price; we look at the decisions made during planning, construction and project management because these ultimately determine whether a project becomes an asset or a financial burden. Let's focus on three areas for instance: cost , time and quality.

Cost

The cost of construction determines the final cost of the property , which determines how much you can rent it out for or the total mortgage you pay. What affects the cost of construction? We have the micro environment; the internal decisions made by the project team and the macro environment which are the external factors beyond a project's control. Developers are seeking a return on investment, that's why the cost of units skyrockets which impedes on the affordability of the unit to the final consumer. A buyer should therefore ask themselves , I'm I buying at premium prices? Is this price justified? And while there are other underlying factors that affect the price per unit, how the project was managed plays a big role. As an investor or a client simply looking to live , you should always ask whether the property will still make sense financially in 10 years.

Time

Let's dive into time, it shapes how much a property costs , how well its built and how valuable it becomes. If an investor buys an off-plan apartment expected to be complete in 24 months but it takes 36 months, rental income is delayed by 12 months , loan repayments may have already started and most importantly the investor loses the opportunity to reinvest that income elsewhere. Therefore, what question should a buyer be really asking? The developers track record and whether value of the property will appreciate over time or oversupply will doom the investment.

Quality.

What of quality? Good quality extends the lifespan of the property. A property that remains structurally sound for 50 years is worth more than one that begins to deteriorate 10 years later. Good quality , speaking of thermal, water and materials equates to happy tenants who are more likely to renew their leases , reducing vacancy periods and improving cashflow.

At first glance, the property market may seem like a world of listings , negotiations and transactions. But behind every investment , lies a series of decisions made long before the keys are handed over. As a construction manager , my goal is to help you understand the story every property tells before you invest in it. There is what everyone sees and what a construction manager sees and that is what matters to investors and buyers. Informed decisions don't begin at the viewing , they begin with asking the right questions.

About the Author

Gertrude Benedict Wanjiru is a construction management trainee and a certified digital marketer with a deep in the real estate industry. She believes that every property tells a different story which must be well narrated for value to be seen. To find the more content about the author use the link attached. Social media handles