It is important to conduct a real estate feasibility study to examine the possible outcome either positive or negative for a real estate project before investing money, eff
ort and time into it. This study also deal in consideration for legal, technological and economic issues as well as other factors which are important for the completion of a real estate development.
There are five (4) steps in conduction a real estate feasibility study such as market analysis, location analysis, competition analysis and risk analysis. During market analysis, the space supply and the development of space demand as well as the space vacancies should be examined. Also, the assessment of supply and demand, vacancies, space and rent should take into consideration. The second step is the location analysis. Location analysis includes the geographic dimensions as well as geographic structure and population structure. It also assesses the employment and economic development.
In competition analysis, relevant competitive real estate should be identified. You can prepare a checklist of criteria so that you will estimate the degree of completion of your goals and results respectively. While risk analysis is the identification of the risk such as the development risk and liquidation risk. Examples of these risks are completion risk, cost overrun, financial risk, market and location risk. Through identifying of risk, you can make a decision immediately to avoid problems to occur.