3 Things You Must Know Before Starting Your First Property Development Project in Melbourne
Diving into property development involves a steep learning curve. There are a lot of moving parts, and some important factors to be aware of before you commit to a Melbourne townhouse development project.
As they say, forewarned is forearmed.
- Know your costs.
You’re in this to make money and build your future, so costs are the most important element to understand in advance.
Know your costs in advance. Be prepared.
Get costings from proven, reputable sources for the following:
- Finding and purchasing your development site
- Building design
- Development Application & Permits
- Working drawings (design and engineering)
- Construction
- Subdivision
If you’re looking to develop property in Melbourne’s West, get in touch with us today to discuss your project.
- Know your timeline.
The industry reality is that the majority of projects cost more than they are supposed, to, and take longer. At delcon, we’re proud to be the outlier in this. Even in the midst of the pandemic, our projects were delivered on time and on budget.
However, that’s not the case for the majority. It’s helpful to know this advance, and factor this on.
Broadly speaking, the average timelines you’re looking at are:
- Finding and purchasing your development site
- Time: 1-6 months
- Building design
- Time: 2-6 weeks for up to 4 units
- Development Application:
- Time: 6-12 months
- Working drawings (design and engineering)
- Time: 4-6 weeks
- Builder quote and contract
- Time: 1-2 weeks
- Building Permit issuance
- Time: 2-4 weeks
- Gaining Finance
- Time: 4-12 weeks
- Construction
- Time: 52 weeks pending size of project
- Subdivision
- Time: 10 weeks
With a development project, time is money, and extended holding costs can significantly eat into your expected return. Ensure you partner with a trusted, proven builder who can get the job done on the timeline agreed upfront.
- Your site limitations
Your site will make or break the project. Do not settle on an average development site. Just because you can develop a site (i.e. it’s big enough), doesn’t mean you should.
Firstly, you need to understand the physical characteristics of the land, such as:
- Location
- Size
- Shape
- Frontage
- Slope
- Orientation of the land
- Neighbouring properties
- Easement and verge items
- Overlays
Doing your due diligence about the above and any other other factors will save you from jumping into a development that’s just never going to pay off.
Keep in mind that less properties are going to pass the test than properties that do.
However, if after this due diligence you decide that the site is a potentially profitable townhouse development site, you can move onto feasibility.
A feasibility study determines whether the cost of holding, building and subdividing youre Melbourne townhouse development, is going to cost significantly less than selling / renting out the properties once they are complete.
If you’re looking to build a Melbourne townhouse or other multi-unit property development in Melbourne, speak to us about a free Feasibility Assessment today.
If you’re ready, don’t hesitate to reach out to our expert design and construct team.
Contact us today on 1800 335 266 or email info@delcon.net.au today