Property development is a great option for people who are looking to invest in something that will give them a good return. It is a bit more risky than other investments, but the rewards are potentially great!
For those considering entering the property development business, it is important to weigh the risks and rewards carefully before making any decisions. If you're hoping to find a site that has the potential to make you money, learning how to purchase the property with the most potential is the first step; you will want to be sure that you're getting a great return on investment.
There are a few things to keep in mind.
It is important to do your research and understand the market you are investing in. By researching the type of housing that is selling or is needed in the area, it ensures that you are able develop properties that will appeal to the local market.
What is the demand for completed product? There are various build types you could do, these include; single or double storey options; duplex or dual occupancy; granny flats; home office; accessible housing design, and there are others. Are the options listed a possibility for the site you are looking at?
Search for sites that are centrally located and have good accessibility. These sites will be more likely to attract tenants or buyers, and you'll be able to charge more for rent or sale prices. It's also a good idea to look for properties that are close to amenities like schools, hospitals, and shopping centres.
You could have a large block or property that you could get approval for a second dwelling, or even potentially a knock down rebuild of your current home. Perhaps you could subdivide the existing property for the construction?
You will need to establish a solid plan for what you want to do with the property. Will you build and sell? Or build and rent?
The cost of construction is also important; if the site is too expensive to develop, i.e. costly site works: it may not be worth the effort, money and time you put into the project. Which builder will you engage for the work? How long will you be waiting for that builder to start the construction of the site?
Do you have pre-approval from a bank, or financial institution for your project? What is the availability of finance for the dwellings? What is the potential return on investment, after all the costs?
Another great questions to ask yourself is; if this property doesn't sell, or rent, is it a place your family could live?
Talk to the local council to see what the wait times are for such a development, and what the other approvals are that are needed for the area.
The risks of property development include:
1. The possibility of financial loss: If the project does not go as planned, or if the market changes unexpectedly, you could end up losing money.
2. The risk of legal problems: There are a lot of regulations involved in property development, and if you do not follow them carefully, you could face legal problems.
After careful consideration of all the above, do you believe that property development is viable for you? It can be a very profitable endeavour and we believe is worthwhile, with the right timing, and in the right location.
Integrity New Homes has various styles of homes available to view on our website, including granny flats, duplex designs, dual occupancy homes, home office designs, single level and double storey homes.
Integrity New Homes also has an excellent range of standard Designer Inclusions that are supplied by reputable companies such as Bunnings, Reece Plumbing, Laminex, James Hardie, B and D Doors, and PGH Bricks, to name just a few.
If you are a mum and dad investor, we specialise in helping you to plan, design and create the right investment that suits your budget and needs.