Understanding Real Estate Business: How Does an Ideal Real Estate Company Operate? (Part I)
When a prospective client looks for an apartment, he considers a number of factors for his decision. This includes location, price, size, Developer Company etc. But do client know what goes on behind the scene before client approaches a real estate company? Here we present to client how an ideal real estate company in Bangladesh functions from acquiring land to providing post-handover service so that client gets a better understanding of the whole process.
The first step in developing apartments is to find a suitable plot for the structure. A real estate company, when looking to develop apartments usually looks for small land size which can range from 5 katha to a maximum of 20 katha. For building a gated township community, a developer company may look for larger land size which can range from 40 – 50 bigha.
Checking land ownership
After selecting a suitable plot, the next step is to verify the land ownership which is a highly crucial step in the overall process. This is because if there is some dispute in ownership, it spells endless woes for many generations to come as they will be stuck with a disputed land.
Checking financial viability of the project
At this stage, developer companies check if the proposed project is financially viable or not. This means analyzing opportunity cost to see if the investment is profitable for the company. This can be done through simple financial analysis which takes into account revenues and expenditures under different heads. However, a drawback of this analysis is that some expenditure heads can be missed and revenue without proper survey can be misleading and the risk factor of such a project will be high.
An alternative to this process is to carry out a complicated financial analysis which can be a very detailed and complicated process. In analyzing the financial viability of a project, the company should try to find a medium balance between the two kinds of analysis using software tools which will give a correct interpretation.
Any miscalculation in this analysis finally either result a loss, for which both client and developer suffer at the end.
Once the developer company finds that the project is viable, the next step is to negotiate with the landowners. The negotiation is done in such a way so that both the parties are benefitted equally or until both the parties come to satisfactory terms. After this, an agreement is signed between the parties to proceed to the next stage of design phase. An unbalanced negotiation finally has an impact on the part of land owner.
At first, architectural design is carried out based on a schematic architecture design. Reputed developer companies in Bangladesh carry out architectural design following certain rules and guidelines which ensure that there is no problem in the future. However, some developer companies may be prone to violating design rules. In such cases, as a prospective apartment buyer, client should check that the design is in compliance with rules and regulations. Any violation in rules becomes a life time liability for the end users.
After the initial design phase, a physical model is made of the building to be developed. An advantage of this 3D modeling is that as an apartment buyer, client can visualize the apartment, check the surrounding landscape, apartment facing and everything to get a clear picture of what he will be buying. At times, merely 2D presentation may become misleading for a purchaser.
When designing a building, the exterior façade is an important factor to consider for the architect. This is because the exterior façade is the first thing the client sees when choosing an apartment and it needs to be aesthetically appealing.
The next step involves structural design during which a detailed analysis is done after consultation with the architect team. Structural 3D model needs to be developed in this phase which is important in order to carry out proper structural analysis so that construction work can commence smoothly. The structural system determines the longevity of the building for the apartment owners.
Keep a look out on our blog page next week to catch part two of this article.