Planning Your First Multi-Unit Property Development Project
Deciding to embark on a multi-unit property development projectis a significant decision. It’s both exciting, and a little daunting. For a property development project to be successful a great deal of research and planning needs to occur. You don’t want to waste your time and money on a project that isn’t going to get you the results you’re after. That old adage that ‘not planning is planning to fail’, could not be more true then when it comes to property development.
When you start planning your project, it will be come evident quickly that without drive, patience and resilience, your development will not succeed. The amount of research, time and money that goes into a successful property developmentis huge as the process is complex.
Your planning will start with finance. You need to figure out what you’re willing to spend, and how much you can loan. Once you know this, you can set your budget and start researching suburbs. What you’re looking for is an area with established or older homes, and good infrastructure and facilities. You’ll need a suburb that is sought-after or up-and-coming, but also within your investment budget. When researching suburbs for property development you’ll be analyzing house prices and considering other costs: (purchasing, demolition, planning, design and construction, sale, legal etc.) and comparing these against potential sale income of the homes that you build.
In this stage alone you’ll likely be speaking with a few professional services including a financial planner, a mortgage broker, banks and real estate agents. The theme of consulting industry experts will continue throughout the entire process. You cannot pull off a successful multi-unit property development without a quality, experienced team. The sooner you get your team in place, the easier the project will unfold.
To execute your development you’ll need collective knowledge and expertise in the areas of finance, markets, property, economics, town planning, legal processes, design, construction and marketing. Finding and vetting professionals in each area can be time consuming, but is ultimately well worth it. Reach out to others in forums, Facebook groups or other networks for personal referrals of great services in your area.
The other option is to engage a specialist multi-unit builder in your area, similar to delcon design and construct in Melbourne, that offers a turn-key service. With a turn-key service your builder takes care of everything from design and town planning, to construction. Once you have an understanding of yourfinance capacity, an experienced property development builder should be able to link you in with a quality network to help you with, or manage the rest.
Contacting a design and construct team early is your best chance of success. At delcon, we can even assist you with advice about the block of land you’re considering on purchasing. We offer a free, no obligation Feasibility Assessment for our Melbourne clients that takes into account the likely costs and return potential. This process is vital to ensure you don’t end up in the wrong investment.
If a turn-key service isn’t for you, you’ll need to have the time to invest in the project and be very hands on with coordinating each stage and multiple professionals. The outline below is a brief summary of the planning processes that will be required.
Initial / Pre-purchase
- Review contract of sale (Legal)
- Review zoning / planning (Planning department at council)
- Determine development potential of your land (Council / Town planner / Consultant)
- Initial design concept (Building designer / Architect / Draftsperson)
- Determine approx. build costs (Builder /Project Manager/ Quantity surveyor)
Planning approval
- Building design documentation (Building designer / Architect / Draftsperson)
- Initial costing review (Builder / Quantity surveyor)
- Land survey (surveyor)
Construction
- Working drawings (Building designer / Architect / Draftsperson)
- Complete costing and contracts (Quantity surveyor / Builder)
- Finance (Bank, Broker)
- Construction(Builder)
Finalise
- Apply for subdivision (Council)
- Sell / Rent properties (Real estate / Legal)
The above is not an exhaustive list but should provide a good idea of the services and processes you’ll need to undertake to pull off a successful development project.