Common Mistakes New Property Developers in Melbourne Make
What are common mistakes new developers often make?
In this video our Director, Daniel, explains the pitfalls many new developers make – and how to avoid them.
The most common mistake a new developer makes is the lack of investigation or a lack of understanding with the site’s capacity.
A lot of people seem to think that their site has the capacity of four units because the site across the road, was developed with four units. That’s not the case at all.
Each site has its own constraints. You have to respect neighbouring properties, shadowing, all sorts of things that have an impact. No two sites are the same, and each site needs to be individually assessed.
Another mistake is just not engaging the right team. A lot of people have come to us historically with a design, but without full understanding, or just being completely misled.
For example, where we build another firm’s designs, we often need to raise questions about the drawings. It’s often the case that the owners themselves haven’t been made aware of certain things – even thought they’ve been engaged in a 10 month process with a third party.
These sorts of scenarios tend to lead to impact in cost, as they were intending on getting in one direction. However, the project was driven in another to try and collectively work together on a budget target.
In other cases, clients have come to us with designs and an anticipation of a building application to pass quickly, and we find that there was never the initial discussion of what total development cost to aim for.
The project is just headed in a direction which isn’t aligned with the financial goal of the development.
Another common mistake is going for the cheapest quote. Often if a quote is significantly lower than others, there are elements that are assumed to be included that in fact need to be added in for the project to pass final inspections. New developers need to be wary as when these components are added in afterwards, these may come along with inflated variation costs and have a significant impact on the project.
It is very important to understand the scope of the contract, and the specification of the inclusions. Compare each quote thoroughly, and ask lots of questions before making your final decision.
For more information, and to discuss your next Melbourne property development project, give us a call on 1800 335 266.