When looking to develop land in Arizona (or anywhere for that matter), it’s always in the buyer’s best interest to conduct as much research as possible before signing any contracts. This is where a land feasibility study can really help out. These studies are designed to help developers make as informed a decision as possible about the land they are considering buying.
In this way, we can determine if the land is viable and worth the time and financial investment while minimizing risks to the buyer and potential investors.
Who Conducts the Study?
While it’s possible to work with a land consultant to conduct the study, many investors and developers choose to work with specialized teams for peace of mind.
For example, an experienced civil engineer would be brought in to check utilities and water access; a surveyor to analyze the slope and overall topography of the lot; a land surveyor to test the soil quality and search for contaminants; an attorney for all legal matters, and so on.
Once the results are in, it’s much easier to determine if the land is feasible and how the project should move forward from there.
What Does the Study Focus On?
These studies can be fairly in-depth and cover a lot of topics. The way they determine the viability of a project can be broken down into a few main criteria:
Technical Feasibility
Is the land physically capable of supporting your development? To find out, the study analyzes the topography and slope of the land and checks for potential drainage issues. It also tests the soil quality and checks for contaminants and other possible issues and assesses the surrounding vegetation.
Is the land connected to utilities and other necessary infrastructure, and if not, how difficult will it be to do so? A civil engineer is typically the best person to judge this, and in cases where it isn’t connected, develop a plan of action that makes sense for your budget and schedule.
Environmental Implications
In some cases, an environmental study discovers protected land or wildlife on the property. Something like this could completely upend a potential project, so it’s much better to find out early on before signing anything, in order to avoid serious legal issues and scheduling delays in the future.
Costs
Based on other findings, the study can provide a cost-benefit analysis and a realistic estimate of project costs. From this, you can figure out a practical budget. The majority of investors will want this information before agreeing to take on the project.
The study itself ranges in price depending on how in-depth it goes and what type of development you’re looking to build. Always make sure to ask for an estimate beforehand since there are so many variables involved. That said, an upfront investment is well worth it in terms of the study saving you and your business partners a lot of risk and budgetary issues later on.
The Title Report
This part of the study investigates the financial and legal history of the land and searches for any existing liens and easements on the property. They also search through public records to research all known previous owners and any legal issues involving the land.
Negative findings in this step of the study can be a deal-breaker for many buyers, as they will require a lot of legal fees and time to sort out should they decide to go through with the purchase anyhow.
What Next?
If the study gives positive results and your team and investment partners are satisfied, it’s time to start conducting market research and further due diligence. Once that’s accomplished, it’s likely time to move forward with development!
But even if the results of the study turn out negative, it’s still a positive outcome in the sense that you’ve protected yourself against a bad investment and saved yourself a lot of time and money. Use this time to discuss solutions and/or to investigate new spots for potential development. A competent team should be able to offer you good advice on how to move forward from this point.
If you’re new to the industry and looking for a team of professionals to assess your land and help you move forward with your project, consider APX West for your project needs. Contact us at 928-412-3570, we have the resources and knowhow to see your project through to completion!
