How to keep your investors onside – what every property developer needs to know
Investors tend to see property developments as high-risk options, as the asset they’re being asked to lend against doesn’t yet exist. And in the post-recession climate, and the unpredictable times we find ourselves in, they seem more reluctant than ever to finance them.
Developers must therefore guard against giving them any excuse to say no.
In my experience, less-than-adequate project accounting can be one such excuse.
Robust project accounting allows a development’s stakeholders to monitor the financial health of the work in progress. Without the transparency it brings, any problems with a scheme could go unnoticed until they cause serious financial damage to the project.
That’s why investors will often insist on seeing evidence of good project accounting before deciding whether to fund a development.
Best practice
So how can developers go about ensuring their project accounting is up to the mark? I believe a robust process depends on three vital elements:
- Forecasting
- Reporting
- Timelines
Please get in touch if you’d like to discuss project accounting for your property developments.