How To Get Started In Property Development
Most investors start their property development journey after hearing about the financial return potential of the real estate market. If you’ve researched different investment options and you too have decided that you’d like to try your hand at property development, it’s an exciting time for you!
There are a few options to go about getting started in property development.
When you’re starting out, with no prior residential building, real estate or development experience it’s not advisable to jump into a large-scale property development and attempt to manage the entire project yourself. You could of course, but the chances that you will get the best return on investment possible are slim. It’s even possible that you won’t turn a profit at all.
Real estate investment and development is a complex, risky and expensive endeavour – but the return potential is strong. There are a lot of very high value moving parts, and significant levels of regulation and legalities. One mistake or error in judgement can be extremely costly, enough to even remove the viability of a project.
Due to the nature of the marketplace, when getting started in property development, it’s advisable to start small or seek assistance from a professional. Many new investors have used one of the following strategies and seen success.
1 – Start small
- Start small with a residential property development
- Partner with an experienced property developer and learn from them during the process
- Engage an experienced property development builder who can take care of the entire process with a turn-key service.
There are a lot of different projects that fit into the category of property investment and development. This can include small-scale developments, demolish and rebuild, or demolish and rebuild multiple residences (multi-unit) and subdivide. Keep in mind that a residential multi-unit build could be anything from a duplex to five (5) or more residences.
Starting with a smaller scale development will be easier in terms of time, effort and resources required. The regulation and paperwork complexity will be significantly reduced with a small-scale project. It will also be less expensive and therefore less stressful and easier to manage unexpected expenses or budget blowouts.
2 – Turn-Key
A turn-key solution is a service offered by a specialist builder. The client will engage a builder to manage the entire property development, from design to completion. This includes all planning applications, paperwork, construction management, building and landscaping. The holistic project management involved in a turn-key service allows a new, inexperienced or time-poor investor to complete a development, without having navigate the process.
Many of delcon’s projects are turn-key. Our clients enjoy the benefit of our knowledge and experience, and trust that our strategies will deliver the results they’re after. Our reputation of high quality and high ROI is built on a decade of success with multi-unit development projects in Melbourne.
3 – Partner
Other new investors choose to get started in property development by partnering with an experienced developer. The investor would then benefit from the knowledge and professional network gained from their partner’s prior developments. These lessons learnt during the multi-unit project process will be invaluable for subsequent project, both in terms of time and resources.
Additionally, a partnership will have pooled resources, and therefore be able to participate in a higher value project. In property development, higher value projects have the potential to generate significantly increased percentage of return.
Keep in mind that a partnership, a trio or a team of investors, may still choose to engage a builder with a turn-key service. In fact, this is especially the case with higher value projects and multiple investors. Having an external party manage the day-to-day elements of the project allows the clients’ peace of mind knowing their project is in safe hands and progressing at an optimal timeline for their goals.
Get customised advice
The options we have documented above are of course, not the only ways to get started in property development. These ways however are tried, tested and effective. The best thing you can do before commencing any large investment project is to do your own research and get advice relating to your personal situation and financial circumstances.
If you’re interested in getting started with a property development project in Melbourne, delcon design and construct are local Melbourne builders. We have over a decade of experience designing, building and managing multi-unit development projects. At delcon, we’re passionate about helping others achieve development success. If you have any questions relating to a potential or proposed multi-unit development in Melbourne, give us a call today on 1800 335 226.