What Are Your Options With A Property Development?
Before you commence a development, it’s important to know what you want out of it.
Do you want ongoing revenue from rent? Do you want more equity? Do you want a larger cash payout? Perhaps it’s even a combination of these things, or perhaps you’re developing for personal and family dwelling purposes.
The great thing is, with multi-unit development projects in Melbourne, you have options.
If you have the ambition, a great team and realistic expectations, you can embark on becoming a property developer and do it successfully.
Property development is achievable thanks to more choice in finance options and potential development sites, as well as experienced mentors who can support you every step of the way.
The road to becoming a property developer is made much easier when you have a great team around you.
At delcon, we suggest your property development team should include as a minimum:
- A specialist multi-unit builder
- Legal advisor
- Finance broker / banker
Having an experienced and professional team to mentor, guide and support you is crucial to the success of any property development – whether it’s $1M or $100M. It can make the difference between a successful development or one that causes you immense stress.
At delcon, our focus is on creating the ideal development for our client’s needs and goals. We’re with you from the very beginning until completion and beyond, with many of our first-time developers coming back to our team to create their next success. As a leading property Melbourne multi-unit builder and development experts, our design and construct team are with you every step of the way.
One of the most important aspects of planning your development should be mapping out your end plan. This is important to achieve success as a property developer, as you and your development team will know exactly what the end goal is for you.
- Ask yourself why you have decided to become a property developer:
- Are you wanting to build more projects after this one?
- Create a portfolio of assets (or add to your existing portfolio)?
- Hoping to make a tidy profit for other purposes?
As each project is unique with different challenges, it’s best to consider these questions based on your current project. Your longer-term view will have differing exit strategies, so for the purposes of knowing your goals on this project, answer these questions based on the immediate development.
At delcon, we advise undertaking market research prior to purchasing a development site. Meet with several real estate agents, compare current market prices versus pervious sales, and ensure your development could be priced competitively and in line with the current market value. For example, if your development costs require you to sell a property for $700,000 each, there’s no point acquiring a site in an area whose market value for a similar dwelling is $500,000. You’ll be losing money before you begin.
If you’re planning a buy and hold strategy, where you retain the development for equity purposes, you need to review the market rental prices. The key elements with market research for buy and hold plans, is comparable rental prices in the same area and vacancy rates.
The benefits for a property developer with a buy and hold strategy is you could use the equity for property refinance, and plan your next project based on the equity already held.
Another option is to sell some dwellings, and retain some, so you’d need to assess both market research angles for this plan. This is a good idea if you are wanting to accrue assets and grow your portfolio, but also want to release some financial burden.
delcon have been leaders in development and construction, from houses to multi-unit development in Melbourne for many years, and we’ve experienced every scenario imaginable when it comes to property development strategies. Give us a call today to discuss your options and what we can do to make your property development dreams come true.