The risk of borrowed capital for commercial, industrial and residential property developments

• Main Author: Loock, Morne
• Format: Others
• Language: English
• Published: Nelson Mandela Metropolitan University 2017
• Subjects: Commercial buildings > Finance; Industrial sites > Finance; Real estate developers > South Africa; Financial institutions > South Africa
• Online Access: http://hdl.handle.net/10948/18288

Most property development firms who invest in property will need to raise some extra financial support. Unforeseen or unexpected expenses can arise at any point in time during the development process. Calculated decisions should be taken with regards to the financial circumstances for any property development project. Decisions should be taken not only for the present but for the future as well. It is therefore important to understand the market and the current economic conditions before applying for capital to fund a property development project. There several types of finance available to fund property development, these include long term borrowing, short term borrowing, construction loans property development investment trust, second mortgages. There is risk to all of the aforementioned finance available.