Each of us is looking for a place for himself, a piece of land where he can settle, prepare a place for a family, meet socially or simply develop his own business. We stand with the will to build, with the intention to create something out of nothing, and we ask ourselves: how, where and when …
A construction investment is an extremely complex subject, an undertaking that needs to be properly thought over and coordinated. Thought arises in the individual, while planning and execution – with the help of many people who, working together, turn the empty field into your dream place.
In order to be a successful and well-serving investment, a house, office, sports or public building must meet the appropriate requirements. These requirements determine the decisions to be made to make everything turn out the way we want.
Below, I have outlined the top 10 things that will make your steps on this new path easy and successful.
A bicycle trip outside the city, a meadow smelling of herbs warmed by the rays of the August sun, a light gust of warm wind, merrily rustling trees, a growing metropolis in the distance – many will say that this is the perfect place for a home. Why here exactly? After all, it’s a bit far to work and the road looks more like an off-road jeep than a family car. These are important things, but whether they are to dictate our choice … well, not entirely. It is a perfect location for a single-family house or even a semi-detached estate. People want to get away from the hustle and bustle of the city to the suburbs and get some fresh air every day. If it is still a hilly place, our advantage is a panoramic view of the surrounding area and, often, historic buildings. We encounter such situations in Krakow and its surroundings, such as the Skotniki district, where the surrounding hills allow you to admire the Monastery in Bielany in the light of the setting sun. If the area is additionally not intensively developed and the surroundings are heavily wooded, we have a perfect combination for lovers of nature, peace and quiet. Thanks to this place, a person gains strength for the next day faster and does not feel permanent fatigue. A new road can always be made and the situation of connecting the city center with the suburbs is getting better and better over the years. But what will happen when we suddenly put an office building in this idyllic land? … Well, degradation, nothing will fit here. The connection with the city for office workers will become a nightmare during the day, the surrounding greenery will be obscured and will lose its value for the local residents, the building will not be a visible showcase of the company and it is possible that the profit from the lease area will never be returned, valuable land will be inappropriately used. Therefore, always remember about a place as a factor that generates matter and energy, a fuel that will be properly managed by every business. If you still own a plot of land whose purpose does not match the place or surroundings – do not hesitate to sell it and find a better one – this move may pay off in the future three times over. Of course, you should remember when to buy and when to sell… and that’s another point.
2. Time to shop
There are times better and worse for the purchase of land. We have no direct influence on stock market fluctuations or declines in value, but we can predict them. As we know, the economic crisis is caused by many situations in the world, such as pandemics, conflicts, “Stock market crashes”. These are different things, however, they are characterized by a certain cyclical nature. I do not penetrate anymore whether these more or less equal intervals are caused by some evil plan of the people in the government or simply this is the cycle of matter and energy in the universe – every 7-10 years there is a decline and then economic growth.
Knowing this, you can predict when to set aside capital and what time to choose to buy a plot and start the investment. It’s definitely best to do it during the so-called depression or economic recession where land prices are at the lowest in years and then, about two years later, complete the project and start construction on the plot of land purchased. The prices for labor and construction materials are then relatively low, everyone takes a job and is not picky, contractors agree to terms that are better for the investor. Many people then want to compensate for the losses of previous years and often it is thanks to the construction industry that growth occurs again. The availability of plots for sale is then exceptionally high because the real estate stock was accumulated during the stock market decline due to the lack of demand.
3. Demand – Supply
When choosing a plot, we must know what it is intended for so as not to incur losses. If there is a demand for houses outside the city at a given moment, it is recommended to purchase plots in the above-mentioned location for single-family housing. If we see an upward trend on the market, the development of entrepreneurship, more and more companies will need a place for themselves in the form of office space. In academic cities such as Kraków or Katowice, there is a demand for collective housing buildings and apartments for periodic rental. In cosmopolitan cities such as Warsaw, there is a demand for self-sufficient residential and service complexes and even separate districts (Wilanow, Port Praski, etc.).
4. Our wallet
Of course, in order to start investing, you must have adequate capital set aside. If it is a family resource, property derived from the company’s income or even other real estate “earning for itself and for us”, then we are in a very comfortable situation. It should be remembered that investing in the construction industry is associated with a certain risk, but it is lower than, for example, currency trading or setting up an innovative business – we are sure that the money will at least pay off.
What if we do not have the opportunity to buy land immediately and our dream place is waiting – there are also credit opportunities, business partnerships or even loans from friends. Banks are willing to provide financing because they know that it is a good investment and will not lose its value. However, before starting a loan, banks must carefully analyze the data on the construction intention and calculate creditworthiness. Very often, an architectural design is required at the level of a construction project in order to accurately determine the cost estimate. If the assumed income from the sale of the building or rental covers the cost of the loan, institutions see no problems and the contract is usually signed. It is a complicated process, but you shouldn’t be afraid of it.
5. Local law
There are three basic acts of local law in Poland. The first two are the so-called “Liquid decisions” – Decision on Building Conditions and Land Development and Decision on the Location of a Public Purpose Investment.
The so-called “WZ document” is an administrative decision issued by the appropriate county or municipal authority in order to determine the possibility of building development in the area designated by the investor. It can be made for any plot not covered by the Local Plan and other acts of local law. You do not have to be the owner of the plot to have such a decision. It is enough to submit an appropriate application and an attachment with the project to the office responsible for issuing these documents. WZ document is prepared on the basis of spatial analysis – buildings around your plot are “scanned” by officials in terms of spatial and cubature parameters and then averaged to baseline values. On the basis of these values, the maximum dimensions of the future investment, its purpose, utility program, etc. are determined.
The Decision on the Location of a Public Purpose Investment is an act higher than the Decision on Building Conditions and Land Development, due to the fact that it is developed on the order of government and local government bodies for plots that are attractive and large enough to, for example, build a new philharmonic hall or a stadium. Often, this decision is preceded by land purchase agreements by the commune or expropriation agreements. Thanks to this law, we can get home faster on new roads or go to a match in our hometown.
Both types of decisions are made on an ongoing basis and upon request. They are not permanent. In order to build an object in accordance with the law, such decisions must be obtained before starting the design process. It should be remembered that when setting maximum parameters, officials are often guided by professional correctness and do not fully think about the investor. So that the investor is not a loss, the application and the WZ document design should always be coordinated and supervised by an architect with experience and constant contact with the institution.
Local Spatial Development Plan is the local “hard” law. It is a document much more elaborate than the previous two and it is prepared for years, intended for a specific area, most often in a city and “neighboring municipalities”. As an act of high importance, it is developed by municipalities and then consulted with the public. Finally, after a vote, it comes into force, canceling the possibility of building in a given area on the basis of WZ document. The plan includes a map with a legend, where the appropriate markings and references in the written act define the development conditions for your investment. Local Plans are introduced, among others, to sort out the urban chaos that occurred in Polish cities after World War II. However, it has its drawbacks.
While the Decision on Building Conditions and Land Development allows for certain negotiation of appropriate parameters with the municipality, Local Spatial Development Plan is not subject to such a possibility. This is the greatest advantage of WZ document – we still have the ability to control the situation and what we build on the plot. Before the enactment of Local Plans, we can only submit our remarks twice, but it does not give us certainty that our claims will be approved. In the case of WZ document, we have some room for maneuver. Hence the ubiquitous rush among the owners of plots of land where the Local Plan is to enter – everyone is in a hurry to get a Building Permit document as soon as possible. Otherwise, they will have to accept the law that the municipality has imposed on them.
Nevertheless, Local Spatial Development Plan has its advantages. It is a certain stabilization of the spatial and legal situation in the area and the possibility of accelerating the design process and starting construction. Not infrequently, the cubature parameters set out in the Local Plan are better than in WZ documents.
That is why it is so important to find out what applies to us and what we can do before buying a plot. It is most convenient to hire a person responsible for such studies. In our company, we have been dealing with investment and business consultancy as well as formal and legal advice for 25 years. We have the appropriate knowledge and experience to guide the investor and obtain attractive development conditions for him. If you are planning to buy a plot, do not hesitate to write and ask for a cooperation offer 🙂
6. Building law
Another important issue is the general law that applies to us always and everywhere. Many future owners of building plots do not realize that the neighbor, together with his large, wonderful house or office building, limits our investment, often quite seriously. When issuing the Decision on Building Conditions and Land Development, the clerk will not do the shade analysis for you or will not measure the applicable fire distance, and these are very important things, determining the construction costs and the form of the building. When on a site visit, as a prospective buyer, always have the Construction Law and Water Law at hand. See in particular the articles about the distance between the building and the boundaries of plots and the distance between buildings and neighbors, fire safety conditions, the possibility of joining the road and heating network, the possibility of equipping the plot with the missing utilities, the obligation to obtain a Water Legal Permit. Sometimes the gas line passing through the center of the property forces the investor to move the installation, and thus increases the costs by 10-15% of the entire project. As you have already guessed, similarly in the case of a WZ document project, you should perform an analysis and predict all possible critical points. The more work is put into this stage, the lower the costs of time and money will be in the final settlement.
7. Your guide – architect
If there is a real estate transaction, the next step is to choose the right professional who will prepare the conceptual design and then the construction design and obtain the building permit decision. There are many architects on the market and most of them offer services similar to the scope of the offer. In addition to the implementation of the project itself, the offer often includes services such as: obtaining the necessary connection conditions for utilities, all arrangements with energy and goods suppliers, all necessary reports and permits resulting from the law. In our scope, in addition to the adopted standard, the client always has the option of developing bills of quantities and any other benefits of using BIM technology in design practice. I invite you to read my article on this topic: “BIM in practice”.
Some architects calculate the value of the project through the value of the construction of the investment (the so-called “statutory method”), however, it is an over-competitive practice and does not bring real orders. The prices turn out to be too high even for the largest developers. A commonly used method is the conversion of the wage rate per square meter of the planned area, and more often, hourly rates.
Of course, these are not the most important issues of cooperation. In my opinion, the bond that connects the investor with the architect must be unique and valuable from the point of view of mutual understanding and each other’s needs. A good architect is an artist who, above all, thinks about the good of the client, but also, to an appropriate degree, about his vision of space and the correlation of the object with the environment and society. The choice of an architect should not be guided by the price, but most of all by the values conveyed by his ideas and visions recorded in the projects, and they primarily tell us what to expect from the final effect.
8. Foreground of the construction site
Before starting construction works, cost estimate documents should be prepared. It is an indispensable part of any serious realization. After receiving the detailed design prepared by a given architectural office, the cost estimator undertakes a cold calculation of labor and material costs, taking into account the general hourly wages of a given worker on the construction site and material costs. The next step is to find the right company to build our facility. This is a topic for a separate article, but I will mention that the recommended selection method is to announce a tender where each company submits its offers for consideration. There should be multi-stage tenders where from a group of, for example, 20 companies, 3 emerge and they will compete with each other to provide even better conditions than at the beginning. Choosing a single contractor is profitable if we have been cooperating with a given company for a long time and we know that the works are of good quality and at the right price. Usually, after signing the contract, the contractor carries out his own cost estimate documents on the basis of which the investor can either accept the prices and the manner of making the given elements or submit requests for “Design revisions” to the architect. Either way, the contract is binding on both parties and the time to start construction is getting closer. The rest of the duty belongs to the construction company. The investor only needs to notify the construction supervision authority and the main designer of the intention to start works.
The most important issue at this stage is mutual coordination. This task belongs to the construction site manager, but his duties are statutorily limited to the construction site. The question of who performs orders, material deliveries, measurements and construction inventories remains. Part of the organizational work still rests on the investor, who manages the construction site remotely, resolves disputes and pays remuneration for contractors on an ongoing basis. You can also hire the investor’s supervisor for this purpose, but it is always an additional cost and some of the works carried out by law do not require such an obligation to be imposed on the investor. We know from experience that it is often a difficult time for all participants of the construction process, but the final result rewards everything. The architect supervising the project should come to the site twice a month to check the quality of the works and compliance with the documentation.
10. PR, marketing, sales
These days, they are indispensable ingredients of any successful endeavor. Once the only and most valuable advertisement was a recommendation. It was information filtered by several people, often well-checked and duplicated. What do you think: do you prefer to buy a given product or service when you see an advertisement for the first time in your life or would you rather be inclined to hear the same opinion about a given item from several people at different time intervals. Unfortunately, the oldest developers on the market can afford such a luxury in the form of positive opinions. Often, you need appropriate experience in selling apartments and office spaces.
Currently, marketing is highly developed and companies specializing in these services have developed good tools that bring real benefits. You should advertise, preferably immediately after receiving the Building Permit Decision, so that people have time to find out about what you want to do and see your offer. This should be done with some frequency and in the right places. Almost everyone uses the Internet. Knowing this, you can invest in a good portal where everyone will have access to the design of your future buildings and area along with prices. It is important to present why your object is better than the rest and to dress it in a stylistic graphic design. You will also find these activities in our services. We make cards for apartments, houses, investment logos and graphic designs for websites.
Advertising on classic street billboards is also a good way. These are more expensive services but reach the largest number of people. Physically printed information is remembered better because it is associated with the place where the recipient stayed while reading the message.
In order to sell, for example, apartments, you can deal with it personally or rent a real estate office that will advertise your product through its channels.
That’s all for today. I hope the article was helpful and do best job for your future 🙂
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