Well
researched, analyzed and organized information gathered through
feasibility studies and market analyses can assist developers,
builders, private investors and financial institutions by:
1.
Reducing
the Risk Associated with Investing: Knowing the marketing
capability of a proposed site before investing hundreds of thousands
of dollars helps ease the risk and secure a better investment
for the smart investor.
2.
Expediting Town and Planning Board Approvals: A
detailed report outlining specific target markets, product (style,
design and amenities) and pricing demand relevant to the nature
of current and projected competition, the present life cycle of
the housing market, and uncontrollable variable such as trends,
interest rates, social issues and industry threats allows for
a clearer picture of what the Town can expect for the best and
most feasible use of the proposed development. Best use indicates
that the project will operate at its best capacity based on predetermined
facts and statistics suggesting the path for most probable success
and highest return on investment. This in turn provides the Town
with new tax dollars and a community it can be proud of. The fact
that the developer/builder took the time to have this report done
indicates to the Town the sincerity of the developer or builder
to produce a quality development right from the start.
3.
To Secure Financial Backing: Many local lending
institutions are presently requiring commercial borrowers to present
a feasibility study when applying for a large loan. With more
and more individuals getting into the building business, a tightening
of the money supply and/or increased restrictions, lenders will
require feasibility studies as a pre-requisite to the approval
of development loans or builder lines of credit.
4.
The Sale of Lots by Developers: A feasibility
study offers developers an extremely effective marketing tool
for selling lots to builders who can study the potential marketplace
by reading a thoroughly researched report on the project.
5.
Preparing the Foundation for the Marketing Plan: Based
on the information obtained in the study, builders can create
an overall marketing plan for the development to include engineering
lay-out, architectural designs, and product, pricing and promotional
strategies.
6.
Guiding all Marketing and Financial Decisions: By
consistently monitoring the marketing plan, project sales and
starts, and the project's percentage share of the market at any
given time and in any given marketplace, builders can anticipate
financial shortages and/or surpluses and can make adjustments
to the marketing plan where necessary.
