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Ask anyone who understands market cycles when to develop property and they will probably tell you to purchase development sites in a time of recession or trough and to sell the developed property in a time of growth or when the cycle is at its peak. Whilst at an intuitive level this may sound appealing, there are a number of problems with its implementation in reality.

If you haven't asked yourself the question you have probably heard it raised - ‘so what's a better investment, property or shares?' The forum is typically a backyard BBQ between family and friends and sure enough it will spark interest with certain ardent supporters of one asset class over the other, keen to add to the mix their 2 cents worth of home spun wisdom.

Having heard one too many ill-informed responses to this question, I have decided to write this short article outlining my view on the question. As a property investor, share investor and qualified financial planner I will hopefully provide you with a more intuitive response than those you may have heard in the past.

Are you an employee or a self-employed business person dependant on income derived by sweat of the brow? Do you carry any personal debt or debt over your principal place of residence or investment properties? Do you have dependants that rely on you to provide for their financial security, today and in the future? Chances are for most of us the answer to at least one of these questions is a definite yes.

You are then left to make a choice. Do you accept the risk and hope that you will never become sick or disabled and have to stop working or that you will not die prematurely leaving your dependants with substantial amounts of debt and inadequate financial resources. Or, do you plan for and manage the risk by taking out appropriate insurance.

Whether we realise it or not, managing risk is something we all deal with everyday. For example, the simple process of crossing a street involves a certain degree of risk which we manage without even blinking an eyelid. Imagine for a moment crossing a busy street without looking left and right, without gauging the direction and speed of traffic, and without gauging the distance of the street we are crossing. Thankfully most of us are very good at managing these everyday risks effectively.

But what about managing the risks of something as complex as a property development project? Well, whilst the risks are more numerous and greater in complexity there are still certain measures you can take to manage them effectively. Let's take a look at some of the more notable risks in performing a property development project and how you can manage them effectively.