The main priority for a professional developer is to ensure that the investment would be profitable and will earn enough returns to take on the next development. However, to guarantee this there has to be some form of control and plans in place to deal with the risks. Most of the times when persons are thinking of doing new housing developments in Jamaica, using personal cash to purchase the land and borrowing the higher percentage from a bank are usually the first step.

The persons who are new to this kind of business always get control of the land first, while the professionals will probably leave this for last. However, when you are doing any form of development in real estate and do the latter, this would be putting yourself into a jeopardy from the start and cause your risk indicator to intensify .

If you should look at this from the point of view of a development, you can say that the property is only worth whatever it is zoned for under the town and country planning act and what you will be able to do with it. For instance, you are acquiring a piece of land in a business district and want to develop residential houses or townhouses; you would have to apply for a change of use before starting the project. This is why it is important to learn about the town plans as a developer and know the regulations that are out there to control any activities in development in specific zones.

There is also the matter of the loan to consider when you are looking at the risk indicators. Generally, the ordinary persons who are applying for a mortgage would be given 25 to 30 years to repay. But, if you are doing new housing developments in Jamaica this type of mortgage would not be the best option.

The number one reason why you should avoid this is because the payment has to be made on a monthly basis and this would mean extra cash for you every month. If you take this route, the only persons who will be able to do any form of development is the exceptionally wealthy.

Therefore, if you are not educated as a new developer in real estate investment you would be committing to a piece of land without clear knowledge of what can be done on it and end up buying it with a monetary package that is wrong.

Another factor to consider under the development risk in real estate is knowledge of the market and not having a blueprint system in place. Most new investors will not consider themselves as a manufacturer and therefore would not be aware of the market.

It is quite simple, as if you compare this to the purchasing of items from a store and it is the same as making sure that the features that cause you to buy that product will make it successful. This means that the value is great, price is right for the intended audience, it can do the work that it supposed to do, should be well designed, good research has to be done before the design and a number of other factors that would fit the profile of a product.

The same principles would apply to a development in real estate, regardless if you are doing commercial, industrial or new housing developments in Jamaica. So, save yourself money and time by getting educated about this type of investment and have a proper system in place.

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