It's not every day that you want to buy a plot of land and start working on your dream project. At such moments, we are often blinded by the short-term benefits, favorable prices and the prospect of quick money.
Here are some of the things you should consider:
The purpose of the land purchase should always be in the foreground. All further decisions depend on it. If you want to build a hotel, then evaluate the land with the eyes of a hotel owner or a better hotel operator.
Saying "a hotel would be great here" is not enough. Think carefully about what kind of hotel, a resort hotel, a city boutique hotel, a business midscale hotel or long-stay apartments for students, etc.? Which operator would be suitable, do I need a strong brand, how much RevPAR does this bring more / how much more would a guest pay for the room? What will occupancy look like, etc.? Where is the probability of success the greatest in the short term? Professionals prepare a very detailed feasibility study for this.
What do you need to consider when buying land?
1. There are three golden rules: Location, location, and location
But that alone is not enough. The site must be suitable for the planned use concept - see feasibility studies.
2. Ground value
When determining the price, first of all, use the standard land value as a guide (this is usually lower than the market value - i.e. the value at which you can actually purchase the land). Compare the price with other comparable properties and consider what the property is worth to you.
3. Pay attention to the buildability
A call to the building authority is always a "must" even if a development plan or building permit already exists. Easements, limited personal easements, and building encumbrances are not so easy to see and politicians have their own ideas about urban development.
4. Always opt for a professional appraisal.
Do not save a few euros when you invest millions of euros. This is especially true if the property has existing buildings that may have to be demolished or if contamination of the soil cannot be ruled out. Be careful with properties near railroad lines. Often an expert opinion is required for an explosive ordnance clearance certificate since railroad lines were the primary target of destruction by bombs during World War II. Basically, Deutsche Bahn has a lot of say in the matter - don't underestimate that.
5. Check the background of the seller.
Ask for an extract from the land register and all documents. Are there any other contractual or legal obligations in addition to the land register entries that are not reflected in the land register (see easements)?
6. Don't get involved with promises - especially with regard to buildability, people often advertise with good contacts to the city, and in the rarest cases this works out...
7. Use the services of professionals. It pays off. In addition to legal issues, a tax advisor should also take a look at your project (input tax deduction ?).
8. Check everything critically, get external advice and ask friends for their opinion. If a reasonably priced property is on the market for too long, there is usually a catch. It is unbelievable what the internet often provides.
9. If you are offered the property twice by different brokers, do not forget to declare prior knowledge and check carefully if there is not a double brokerage commission.
Developing a property is a great adventure every time and sometimes the first step on the way to realizing your dreams. Plan long and detailed - the costs of planning are still manageable - with the start of construction this changes abruptly and every delay reduces your margin.
Further questions? Make an appointment with us.