Property development isn’t just for cigar smoking tycoons with billion dollar fortunes and vast property empires. Nowadays all it takes is a bit of savvy, some courage and dash of investment experience and you too can become a successful property developer. With the Perth property market on the rise again, small & medium sized developments represent excellent investment prospects – provided that you have the right skills, knowledge and determination to make them succeed. Check out this handy guide to learn more about what it takes to make small and medium sized property developments successful.
Ask Yourself The Right Questions
If you’re looking to make some easy money then this kind of property development definitely isn’t for you. Being involved and hands-on by their very nature, you need vision, guts and determination to see them through and make sure that they’re successful. Seeing your vision come to life before your eyes can be just as inspiring as it is financially rewarding, but you need to take the time to ask yourself some tough questions before you get started.
- Is this what I really want to do?
- Do I have the patience, drive and determination to succeed?
- Do I have enough property investment experience to take on a particular project?
- Am I financially able to see the project through to completion (including any unforeseen additional expenses)?
- Am I able to effectively deal with stressful situations?
- Do I have enough time to commit to the project?
- Have I done enough research?
- Have I identified the areas I’ll need help with?
- Is my support base (partner, family etc) on board with the project?
- Am I 100% sure the end reward will be worth the effort?
Unless you can answer yes to all of these questions then chances are that you won’t be able to get the absolute maximum profit out of your small or medium property investment. Not being able to make the right decisions or having to outsource too much time, labour or expertise will inevitably affect your bottom line – either in additional costs or a reduced sales price at the end of the project.
Do Your Research
Property developing is a very different ball game to buying an existing dwelling. There are a wide range of factors that can affect the viability of a development project, so it really pays to take the following factors into account when doing your research:
- The Topography: Generally speaking, the greater the slope of a block the more expensive it is to build there. In addition to extra excavation and land preparation costs before building commences, there can also be problems that arise with access to storm water drains if the land slopes away from the street. Make the wrong choice in this department and your project could be doomed before it even beings.
- The Local Council: Every council has its own planning departments and guidelines, and falling foul of them can be a very costly, time consuming and frustrating exercise indeed. Make sure you’re familiar with any restrictions that exist so that you know your planned development is viable (especially if you’re considering subdividing) and will pass through the council approval process smoothly.
- Overlays: make sure you know your prospective investment property is subject to any restrictions due to environmental factors, heritage listing, indigenous significance or flood zone requirements that could impact upon your planned development.
Assemble The Right Team
It’s virtually impossible for one person to possess all the necessary skills, knowledge and expertise (let alone time and energy) to make even a small property development successful. All development projects are different and will require, but in general you should definitely consider the following roles:
- Builder: A good builder needs to be able to understand what you’re trying to achieve and work well with the rest of the team to see it come to fruition.
- Project Manager: A good project manager will make your life a lot easier by taking on all of the day-to-day responsibilities of the project and make sure that everything is running on track on budget.
- Lawyer/Legal Advisor: All development projects require the cutting through of lots of red tape as well as gathering, drawing up, signing and delivering a veritable mountain of legal documents, so a good lawyer who knows what they’re doing can be worth their weight in gold.
- Accountant: because making a profit is the main point of property developing it quite literally pays to have a good accountant in your corner who can ensure you set up the correct structure for maximum profitability, minimize tax liabilities and maintain the operating budget of your project.
Looking for a trusted builder than can help make your small or medium sized development project as successful as it possibly can be? We can match your determination and will to succeed and are able to back it up with the necessary skills and decades of experience. Get touch with us today on (08) 9444 3943 or click here to find out more about what makes us the ideal one-stop-shop for Perth property developers.