Karen Halm

Evaluating a Real Estate Property Before Making The Investment

Any form of investment in a Real Estate property is never a cheap one. It is always a high capital investment venture. It does not matter your mode of payment – low monthly deductions on a mortgage, low interest loan, outright purchase, or joint venture – at the end of it all it is capital intensive.

Wiley Towers – a mixed-use design by Spektra Global

For this reason, many people are able to buy or build just one house in their life time, only a few businesses even own the properties in which they house their headquarters as over 80% opt to rent. Others, both individuals and businesses never own any property at all.

If you, as an individual, business owner or company choose to own a property, then please do not ignore the following:

Get Professional Help.

The mistake many people make in avoiding the most essential item – getting professional assistance. In an attempt to “save” money by avoiding the fees for the service, which they do not realise is only a very small percentage of the entire cost of the property, sometimes as low as 1% – they end up being a penny wise and a pound foolish. This is because they get saddled with properties that drain the life out of their finances with very high running costs, inability to attract adequate revenue, excessive modifications required and so on. So, before you take such a bold step on as individual or a business ensure you have a professional who will help you in evaluating the property under consideration. If you are a business get a team of consultants (architects, engineers, quantity surveyors) who will represent your interests and ensure you get a good deal. And yes, you need this even if you are building and you’ve entrusted the project to a good contractor. Somebody has to look out for you.

These figures show a mixed-use development (Wiley Towers) sketch we did at Spektra Global for a client at the feasibility stage. It helped the investor see more clearly both the visual and financial implications of his vision very early in the process. This helped that team take more prudent choices regarding the investment.

A good architect can assemble the best team to help you.
If you are buying a home, do well to get a professional to evaluate the property you purchase. By this I mean not just a property/real estate broker, a good architect is your best bet.

Clarify Your Objective.

Why are you considering this property?

What exactly are hoping to achieve?

Is it a personal need or want?

Is it for your own consumption or it is an investment that is expected to yield returns monthly or annually?

Exactly what problem are you trying to solve?
– putting idle cash to use?
– providing a roof over your head?
– Lacking advantage of a financing opportunity?
– Generating a new stream of income?
– creating an asset as monkey’s fist to attract more value?
– protecting an already owned asset?

Whatever your intensions are, be clear on it and actually write each of them down. This will form the basis with which the architect and his team will help you with this investment. Their job is to help you accomplish that objective.

Also, do well to communicate each detail as, the time frame within which you would want this transaction completed, the budget allocated for the venture and other stakeholders whose interest must be considered to ensure the success of this acquisition.

Evaluate the Design

Yes you may have a team of consultants crossing the T’s and dotting the I’s for you. But it will be great if you are armed with some simple things to look out for when evaluating the design of a real estate property before purchase or construction.

1. Functionality
a. layout – this must make sense and enhance productivity and the lives of the end-users
b. architectural science – does it satisfy the conditions for the region in which its meant for? Example, if it’s in Africa, how tropical is it? how does it solve problems such as high temperatures, solar ingress, humidity, regional architecture, etc.?
c. structural integrity and feasibility – how feasible is it for the building to stand and within reasonable costs? construction methodology proposed, does it display any “archi-engineering” prowess? is the expertise available in the region or it has to be imported?
d. safety of end-users – in case of fire, earthquake, etc is an effective means of escape?
e. form and aesthetic appeal – is it beautiful? does the form of what has been created suit the problem it set out to solve? is it fit for purpose?
f. environmental impact – what is it going to cost “mother earth” for this structure to be put up? What interventions have the designers put in place to mitigate any adverse effects and/or enhance it? what is the green cover ratio? etc.

Location Location Location

I cannot say this loud enough. Remember that this is a capital-intensive venture. Make sure therefore that you get the location right. A real estate property, unfortunately is not a movable asset so if you get the location wrong you cannot just dis-invest that easily.
The location of your office building influences your brand equity, customer satisfaction and confidence, support from banks, etc.
Similarly, the location of your home influences the quality of your life. Look out for the following therefore when evaluating a property, you wish to invest in:
– Commute time
– Proximity to essential amenities
– The quality of the neighbourhood and the neighbours
– Security
– Other businesses or brands nearby
– the name or the address of the locality
– the address of a business is important
– Flooding potential
– Sights and smells of the locality

To evaluate the location of a property effectively, take time to visit the area under consideration at different times of the day (weekdays, rush hour, weekends, rainy season, holidays, etc.) this will help you see different aspects of the location before directing your hard-earned resources towards that channel.

Any form of real estate investment, is never a cheap one. It’s a marathon, not a sprint. So please take your time, get help and evaluate properly before you make the move.

About the Aurthors

Wiliam and Karen Evans Halm are Ghana’s most sought after design-build architects. They are famous for creating iconic buildings, enriched with breath-taking interiors without compromising on timely delivery of each project.

 They are Associates of the Ghana Institute of Architects, members in good standing with over two decade’s experience in the field.

They are the founders of Spektra Global Limited, an excelling architectural design and build firm, poised to play  on the global market.

You can reach them @ karenhalm@spektra.global , williamhalm@spektra.global or call +233 303 217241 / +233 55 133 2555 or visit their website @ https://spektra.global/

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