Real estate investors take risks in the process of their expectations in the return of the money they invest. In order to calculate the returns on an investment, certain assumptions must be made in advance. Because, accordingly, the investor will decide whether to participate in the project. Therefore, feasibility studies conducted prior to the investment are of great importance. A real estate project is defined as a feasibility study if there is a reasonable possibility of achieving a clearly defined goal for the chosen direction of movement, within certain constraints and available resources. Results extracted from this definition; “Feasibility studies never show certainty and do not guarantee the success of the project, certain targets should be determined before the feasibility study, alternatives should be created for the targets determined in the feasibility study and the suitability of these alternatives should be tested, the answer should be sought whether the conversion to a targeted product can be achieved with a suitable alternative, the suitability of the chosen alternative to various constraints including physical and legal restrictions should be tested. In order for a project to be feasible, it should be feasible in the face of various constraints, and the capital to be used and the amount of people allocated to the project must be optimized”. In order for a real estate investment to be considered feasible; “It should be physically possible, it should be legally permissible, it should be financially feasible, it should be as efficient as possible”. A feasibility study includes executive summary, market analysis, preliminary drawings, cost calculations, and funding sources. This information constitutes the content of market analysis. The next process is to conduct a financial feasibility study.

The general stages in the feasibility analysis process could be listed as;

  • Identification of real estate and its immediate environment,
  • Demand analysis,
  • Market analysis,
  • Supply analysis,
  • Determination of areas to be sold / rented,
  • Cost analysis,
  • Financing cost,
  • Financial analysis,
  • Appraisal