Property development can be a lucrative investment for many, but can also be a complex field to get into. If you have dreams of a rewarding property development career, read the following tips for a foundation on how to get started. Make sure to do plenty of your own research too – property development is a high-risk as well as a high-reward commitment. Depending on your expertise and the choice of people you hire, you can map your profits.
8 Steps to get in Property Development
1. Develop a Plan
Before you get into developing properties, you need to have a perfect plan of action. Begin with working on finding a decisive answer to the question of whether you want to do this as a part-time business, turn it into a full-time business, or are only in it for short-term profits. After developing a detailed business plan, you will need to set goals as well as work on how you are going to meet those goals.
2. Get the Know
How: If you do not already have a basic background knowledge in property development in a way of further education, ensure that you thoroughly understand the field first. Speak to successful property developers at networking events, try enrolling for courses on these topics and read books written by acclaimed property developers.
Also understand the various specialists you most likely will need to work with, which may include town planners, designers & architects, engineers, land surveyors, builders, local council, solicitors and building inspectors.
3. Location, Location, Location
Deciding where to build is, obviously, an important key to property development. Decide what kind of buyers you are targeting: young families, retirees or corporate professionals. Each sector of buyers will desire very different neighbor hoods. It’s often safest to follow the tried and tested route: what suburbs have demonstrated recent growth and popularity among your target demographic? Make sure to look beyond the suburb as well: does the particular street you’re eyeing have schools, shops and transport close by?
Your target demographic will also inform what sort of home you should build or buy. If you’re aiming for retirees, consider a single-story townhouse. If you’re targeting families, build numerous bedrooms and ensure there is a spacious backyard.
4. Know the Rules
It’s always best to thoroughly understand council rules before you begin developing property, to avoid hassles later down the road. Read up on your local council’s rules and regulations to avoid having your Development Approval rejected. It’s also worth working with a town planner, to ensure that your Development Approval ticks all the boxes.
5. Complete a Feasibility Study
A feasibility study will confirm whether your site or building ticks all the boxes. A feasibility study should include a calculation of building costs, the expected time frame of all stages of the project, soil analysis and more. Try to go about your feasibility study objectively: if your site doesn’t pass the feasibility study, be prepared to let it go.
6. Property Development Financing
Being on top of your funding is key to a successful property development career. Developing generally requires more money than a property that you want to buy and live in long term. You will require a different loan to the usual home loan, with no doc development finance being one of the easiest options. Make sure to completely understand the process of development finance.
Speak to your accountant about GST to make sure you’re doing everything by the book. Property investors don’t have to pay GST, but property developers may have to. Make sure you understand the ins-and-outs of GST to avoid issues.
Decide what you would like to do with the property after you have developed it – sell it for a profit or keep it as an investment? This will decide the way you choose to develop it, and what you need to prioritize. Whether you’re developing to sell for profit or keep it as an investment, always keep the end user in mind throughout the building and designing process. The development is not about your personal tastes – in order to maximize your profits, you must tailor the home to the target market, regardless of how much it may differ from your preferences.
Property development is something that many people go into blindly, thinking it is as simple as setting up a property and reaping the benefits. But in reality, property development takes a lot of planning, effort, strategy and much more. The above tips are simply foundational steps to consider before embarking on the actual development process, which will include working with builders, designers, engineers and more.
Author Bio: This above piece of advice written by Justin can help the readers to know how to start in property development using no doc development finance.