OwnerDeveloper’s 5 Step Guide In Getting Started In Property Development
Research & Identify
First things first is researching every detail you possibly can, then go over it again and make sure you didn't miss anything.
You need to know everything about
development and since you are only
starting to get into the game you may
want to invest a lot of time into this step.
The first thing to be looking into is the
kind of development that you are
wanting to do, you can’t be a jack of all
trades so we suggest choosing one and
At OwnerDeveloper we consider a
broad range of developments, if you are
gaining capital off property... it's a
Now, consider your options?
Choose one and stick to it, and once you have mastered that take on the next.
Next is researching the housing market and the costs involved in the particular development you want to take on, all we can say is to be prepared to be in this stage for a while!
To get the hang of things, it may be best to start with a small and achievable project and gradually grow… you don’t want to bite off more than you can chew
The Development Process
Now that you have done your initial start-up research, it's time for you to get familiar with the life-cycle of property development. To master the game you have to know all the rules.
Property development is comprised of a series of stages:
Pre-acquisition - Before you have acquired your property
Concept design - Visualising and designing your project
Permits and approvals - Attaining the necessary documentation,
permissions, and requirements from your local government to develop
Pre-sales and marketing - This stage doesn't apply to everyone.
Some choose to put the property on the market after construction,
others wish to test it before construction. Completing this stage all
depends on how you envision your project and the sort of development it is.
Finance - Securing the necessary funding to commence the construction.
Construction - The exciting part, seeing all your hard work come to life!
At this stage, your construction team are building your project from the
Sales and marketing - If you didn't put your development on the market
pre-construction, this is when you are. Fish the market for reliable real estate agents
in that area and showcase your work of art to the market.
Settlement - Done and dusted! finishing your project and settling the financial exchange with buyers.
At each stage, there will be specific responsibilities and commitments to ensure the success of the project and the entirety of the process can span up to one year.
Don’t forget the biggest influence on each of these stages, time! You need to have proper project management software to be on the track during the entire process of your development … time is money!
Location, Location, Location.
Knowing your location is the peak of your property development knowledge and it can be broken down into two categories, 1. Suburb and 2. The Council
Targeting your location is a great place to start when looking into development, and it’s largely determined by your budget. Targeting areas of growth is the safest option, as you will find the best return however they are also more expensive as they are the more desirable areas. It is up to you to do the proper research and evaluation of suburbs to see what is the development news, looking into what local or state government plans for this area, market trends, and if any current developments are going on. When you have done this research and settled on a budget you can dial down on the suburb or suburbs that you are looking to invest in.
Your development will be dictated by the constraints and guidelines of the local council, so knowing the council is essential to property success.
You need to know the local council rules and regulations, at the end of the day they are the ones who grant or refuse your Development Approval (DA). There are sets of documentation available on the council website that you need to be familiar with, be aware that every council has a different set of documentation and they can be very lengthy and time-consuming to get familiar with.
Due-Diligence and Feasibility
The central point of focus in property development is your due diligence and feasibility.
Doing the proper due diligence on your property will give you the confidence that the project risks are all known and mitigated. But don’t be fooled, there is no such thing as a ‘risk-free’ project, due-diligence will just identify those risks and then develop ways to manage them accordingly. Make sure you complete your due diligence before committing to a project, it can be done on your own or you can engage a lawyer. Either way, you need to be identifying if there are any constraints.
To be a successful property developer managing all the financial elements within your project is essential, you need to be on top of this to be on top of your game! In your feasibility take into consideration every possible cost that will be in the project, it can typically include land, acquisition costs, professional fees, council fees, construction, and marketing. Feasibility can often be a spreadsheet or a software product that accounts for the revenue and costs of your project. Your priority is to be certain that your project is feasible and that the end result will maximise the revenue and minimise costs to deliver a quality outcome.
You aren't the first person who has ventured into Property Development, it is a huge community with everyone helping each other out. Seek out these networks and join them!
They can be on social media or in person, it is a great resource to get advice from those who have gone through it first hand... Sharing mistakes and successes!
You make some new mates and also have direct access to a wide range of information and professions!