NHBB knows that the building industry can be both fascinating and complicated. The industry covers everything from financing to design, construction, marketing and much much more. It’s not just about building your new home - you can also be building for investment! This blog will introduce you to some of the things you need to know about property development. So if you want to build for invesment or simply understand  what it involves, then read on!

Before you develop any property, you really need to do your homework or as it is also known.. your due diligence. Going into property development without the right information,  research and knowledge can prove costly. Property development is not for everyone. you need to put in the work to make sure that the development will profitable.  In order to do this, research and knowledge will be your best friend. You can't just rely on property prices going up as a guarantee that you will make money.

There are processes and evaluation questions needed for developers and investors to go through prior to the development of any property.

To help you better understand the processes, likely costs and timeline,  we have put together the following guide covering some of these factors: Site Constraints & Opportunities, Location & Property Appeal, Project Financing, Subdivision Costs, Site Plan, Construction Sequencing.

We will begin by discussing Site Constraints and Opportunities along with Location & Property Appeal. The other topics will be covered in a follow up blog.

So, what do you need to know about Site Constraints & Opportunities, and where do you start once you think you have found a property?

What is your development strategy?

Before buying any land or property, make sure you are fully aware of what you hope to develop, and what you hope to achieve from it.  Are you going to subdivide, build an apartment block, or construct a group of townhouses? You need to figure out what will the most profitable and if there is sufficient demand for what you are planning to develop.

Covernants and easements.

Complex controls and covenants can stop you from building your ideal development on a lot. Everything from materials, to shapes and size choices can be affected by planning covenants, so it's important to check local regulations carefully before making an investment.
An easement is a section of a property that has an underground service installed which cannot be built over. This effectively reduces the useable area of the block and can prevent you from taking full advantage of the block.

When the property was last surveyed

A block survey can add to the investment costs, but can sometimes save you money. Are any of the neighbouring properties encroaching on the lot, are the fences correctly positioned? Are there any hidden surprises like asbestos in the property?

Price of property and transaction costs

You will need to work out if price is within your budget and available funding. Do you have sufficient funding for this property development?

Zoning details for property..

This impacts types of development permitted . Do you know if zoning changes may be coming into effect in the near future? This could make for a more profitable development, allowing you to build a lot more on the land.

Need for contribution to the local council/shire.

Will you be required make a conrtibution to the LGA?  The answer is most likely yes, depending on the size and value of the proposed development.

Power & Utilities

Is power is available and will it need to be upgraded?
Are utilities and fibre optics are available for the development to connect to. You need to look at water, sewer, and stormwater.  Providing for these can increase costs significantly.

Are there existing building/s on the property?

Demolition costs can vary greatly depending on the size and type of building to be removed.
Infomation on demolishing a home can be found in our Demolish and Build blog and 10 Things You Need to Know Before Demolishing a House.

Seek Expert Advice.

Every industry is generally open to helping people out and no project is ever the same. So reach out to  professionals who are always up to date with the latest industry changes.
A feasibility assessment from NHBB can help indentify any unexpected items that you need to allow for and identify the true cost of your property development.

Book a discovery meeting  now to see how we can help you get started.

 What Tristan has to say: "Developing a property can be a very rewarding one if planned correctly. Our team has market leading feasibility reports and software to help you understand what is really involved in developing a block to build on. The knowledge we can share with you as independents, it’s the greatest tool to have in this current market. You may be surprised that we tell you not to develop, you never know but always get independent advice.

How many people have said that to you before? Contact the team today to find out more."

Keep an eye out for the follow up blog on Property development where we look at financing, subdivision, approvals, construction and marketing.

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