Financial Planning for Your Building Project
If you are new to the world of real estate development, there are some things you should know about financial planning when it comes to building projects.  You probably already have an idea that you should set aside money for repairs, upgrades, and disasters, but did you know that you are required by law to do some financial planning? So when you look over your saving plan for your real estate project, make sure you remember to consider the following:

  1. Warranty Claims. This applies to the building of new homes or condominiums. Under current legislation, builders must provide repairs and replacements for any defects or deficiencies found in the construction or material for the first 1-7 years.  It’s wise to set aside money for the purpose of fulfilling any warranty claims that may arise.
  2. Repair Planning. Any building is going to have need for repairs over the years.  If you are developing a commercial building and will be responsible for the ongoing maintenance, make sure you allocate money for future repairs.
  3. Reserve Fund Studies. For builders beginning a condo development, a Reserve Fund Study is required due to the Condominium Act of 1998.  Reserve Fund Studies allow for repair planning in an organized manner.  This tool is extremely helpful in knowing how much you will need to set aside for repairs/replacements in the future.
financial planning