Buying land for development purposes can be one of the most uniquely rewarding investment routes. However, it can also be one of the riskiest, involving layers of uncertainty, from hidden planning restrictions and undisclosed flood risks to title and ownership complications. 

In recent years, digital technologies have begun transforming the often-complicated process of due diligence, revolutionising how investors approach this stage and ensuring they aren’t left out of pocket.

In this article, we will explore the due diligence process, highlighting the many considerations investors must navigate when purchasing land for development, while also examining how tools like Scan to BIM are reshaping the planning and development sector.

Why Does Due Diligence Matter in Land Acquisition?

Due diligence is an important first step in acquiring land, ensuring a site is suitable for development to proceed. For investors, due diligence when buying land matters for two significant reasons:

1. Financial Risk and Reward

At its simplest level, due diligence ensures that when investors are buying land for development, they are not exposed to hidden liabilities. 

While a section of land may appear promising on paper (and perhaps even in person), there may be concealed issues. Problems such as flood risks, contamination, or restrictive covenants can have financial repercussions further down the line, dramatically increasing costs and even derailing projects completely.

To reduce financial risk and increase reward, land investors must follow due diligence and conduct thorough investigations to protect themselves against making poor commitments up front. This is especially important and beneficial for investors operating on tight budgets or for whom significant issues with the land could carry unacceptable risks.

2. Legal and Regulatory Considerations

There is a legal side to due diligence that includes verifying ownership, rights of way, land boundary lines, and any planning obligations attached to the site. Where due diligence is not carried out, oversights are common and can prove costly. 

Due diligence leaves no stone unturned regarding legal and regulatory considerations, ensuring investors are aware of how the land can be used, where the boundaries are, and any planning obligations.

A Traditional Due Diligence Structure

Before the introduction of technology into the due diligence in land acquisition landscape, investors relied on a combination of site surveys, professional expertise, legal checks, and more to assemble a thorough understanding of a site’s viability. A traditional due diligence structure looked something like this:

• Title and Land Registry Searches: confirming land ownership, boundary lines, easements, and restrictions.

• Environmental and Ground Investigations: identifying flood plains, contamination, subsidence, and other geotechnical issues that could impact development.

• Planning History and Policy Review: examining local plans, past applications, and potential development constraints.

• Market Appraisal: establishing end values, demand, and comparable land transactions.

While the traditional due diligence processes were thorough, they were often very time-consuming. And due to the fragmented nature of the research and information gathering, traditional due diligence was often prone to information gaps. 

What’s more, in order to collect the information needed, investors had to rely on separate consultations, groups of researchers or professionals, and data sets that wouldn’t always integrate smoothly into a single, coherent view of the site. This often confuses matters, making it difficult for investors to make informed decisions.

How Technology is Transforming Site Due Diligence

Advancements in digital tools are rapidly transforming site due diligence, transforming fragmented processes into faster, more accurate assessments that eliminate guesswork. 

With technological support, investors can make better-informed decisions and buy land earlier in the development lifecycle, leading to improved efficiency and significant cost savings.

Introducing Scan to BIM

Scan to BIM is revolutionising due diligence processes; using reality capture technology (typically LiDAR or laser scanning) to create highly accurate 3D digital representations of a physical site. This information is then imported into a Building Information Model (BIM) so that stakeholders and investors can interact with and assess a virtual version of the site.

The Benefits of Scan to BIM Technologies in Due Diligence

For land investors, Scan to BIM isn’t just about creating a visual model, it’s about integrating layers of important information into a single, comprehensive digital environment. The benefits and efficiencies of Scan to BIM technology cannot be overstated:

• Accuracy: Traditional site measurements have always been vulnerable to human error. Scan to BIM is fast, efficient, and accurate, capturing exact land measurements (land boundaries, terrain, and surrounding structures) without the risk of miscalculation.

• Planning and Communication: Interactive 3D models of a site help investors, architects, and developers visualise planning proposals and speed up approval processes.

• Identifying Risk: Prior to investing in site development, investors need to identify and understand the risks. Scan to BIM technologies highlight potential clashes with utilities, protected trees, neighbouring properties, etc.

• Budget Protection: Detecting issues early on reduces the likelihood of unexpected building costs, construction delays, and budget overruns.

By utilising technology in the due diligence process, investors can gain a complete picture of the site and make an informed, confident decision about whether to move forward with the development or not.

How Technology in Due Diligence is Improving Investor Confidence

Land acquisition, for new and experienced property investors, comes with risks. Unhelpfully, due to the competitive nature of the land acquisition market, opportunities should ideally be seized as quickly as possible, putting pressure on investors to make hasty decisions without all the information they need.

Technology advancements are speeding up and simplifying land acquisition processes in the following ways:

• Shortened Timeframes: With Scan to BIM technologies, rapid scans can be made of the site and risks drawn up before the land goes to auction. This supports a more informed bidding process.

• Increased Investor Confidence: Technology provides investors with detailed site models and information, reducing the likelihood of unforeseen costs and strengthening decision-making.

• Improved Collaboration: With Scan to BIM technologies, collaborative efforts between developers, architects, engineers, and planners are simplified. Everyone works from the same dataset, avoiding miscommunication and inconsistencies and helping processes go smoothly.

The introduction of technology into the due diligence process has shifted land acquisition from reactive to proactive, saving costs, reducing risks, and simplifying once-complicated processes. With all these benefits and more, we’re confident that Scan to BIM technologies are here to stay.

Final Words

In the property development market, where competition is fierce and things move quickly, investing in technology can mean the difference between a successful development and a costly mistake.

Traditionally, due diligence would be a fragmented, time-consuming process that still left gaps in investors' site understanding. Yet the emergence of digital tools such as Scan to BIM is reshaping this once-complicated process by offering unprecedented speed, accuracy, and clarity.

By utilising high-quality technologies like Scan to BIM, investors are integrating detailed 3D site models into their decision-making. This means they are better equipped to evaluate land acquisition opportunities, safeguard against hidden and potential risks, and plan developments with confidence.

Whether you are buying land and building a house or looking to invest in a large-scale development, utilising digital tools to enhance the due diligence process isn’t just a nice-to-have; it’s an essential.