5 Things To Know Before Starting Your Multi-Unit Property Development
Five (5) things to know before starting your first multi-unit property development project
Jumping into your first multi-unit development project is exciting, and also the beginning of a steep learning curve. Before you take the leap and commit to a project, stop and make sure you’ve thought about each angle. To help with this, view our free Step By Step Guide to Multi-Unit Development by subscribing to our newsletter here.
As well as the stages of the development process, and how to manage them, here’s 5 things to know before you take the plunge.
1. Know your market
Not all developments achieve the same level of return. Do some research on the recent sale prices in the areas you’re interested in, and look back a little to see the trends and get a feel for the market. If you can spot an upcoming area and buy at a reasonable price you’ll be ahead of the game.
2. A quality builder will tell you when not to build
If you’re going to involve a specialist design and construct team like delcon, you’ll want to get them involved as early in the planning process as possible. A quality team will ask the questions you may have forgotten about, and will advise you of the risks so you’re fully informed. A great builder will even conduct a feasibility assessment for you and advise you if it’s not in your best interest to move forward.
3. Know what council want
The town planning process can take 6 – 12 months. This involves you having preliminary house designs and town planning drawings and applying to council for a planning permit. The designs then get altered if required according to local council guidelines and restrictions.
It isn’t always easy to design what you want to build, as guidelines and requirements may pose restrictions. Instead, focus on your design criteria and align it with what council will allow you to build. You’ll save both time and money if you know ahead of time what the local council will allow.
4. There’s no wrong road
You’ll probably hear to start small with a renovation or a single home on a single lot before jumping into larger scale property development. It doesn’t have to be that way.
If you’re new to property development and want to dive right in to a multi-unit project, a turn-key service is probably your best option. With a turn-key service, your design and construct team manage the entire process for you. From initial phone call to handing over the keys, all the council applications, building design and engineering, permits and construction are taken care of.
By employing a specialist design and construct team with a turn-key service, first time developers can rely on the knowledge and experience of seasoned professionals to help boost their own.
5. Know your numbers
Early on you’ll decide what your desired profit margin is. For a lot of developers, this is often between 15-20%. Use this number to determine whether or not your project is feasible. For more information about this see our post here, and more about our feasibility service here.
Other important numbers are the time periods for town planning and construction. The time it takes for applications to go through council, and the overall build time will have a direct influence on the amount of interest you pay on your loans. This can add up to be a significant amount and delays might eat into your profit margin. Be sure to build a contingency into your costings.
For new developers, the multi-unit property development process can be confusing. The best approach is to align yourself with an experienced builder who specialises in development projects. A design and construct team that can walk you through each step will simplify the process and help you achieve the return on investment (ROI) you want.
To get started on your first multi-unit development, give delcon a call today on 1800 335 266.