{"id":101995,"date":"2024-07-02T16:30:00","date_gmt":"2024-07-02T06:30:00","guid":{"rendered":"https:\/\/propertyupdate.com.au\/?p=101995"},"modified":"2024-06-11T15:54:46","modified_gmt":"2024-06-11T05:54:46","slug":"property-development-guide-part-2-donning-the-property-developers-hat","status":"publish","type":"post","link":"https:\/\/propertyupdate.com.au\/property-development-guide-part-2-donning-the-property-developers-hat\/","title":{"rendered":"Property development guide Part 2 \u2014 Donning the property developer\u2019s hat"},"content":{"rendered":"

Have you ever considered getting involved in property development?<\/a><\/p>\n

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With the good old boom days of the Australian property market well and truly over, many investors are considering how they can become more actively involved in growing the value of their property portfolio.<\/p>\n

They realise that simply sitting back and waiting for their equity to snowball is no longer a real option, so proactive investors are contemplating donning the developer\u2019s hat and physically adding value to their assets in a bid to increase profits.<\/p>\n

Over the years, while we\u2019ve seen many developer-investors succeed in their endeavours, we\u2019ve also seen many fails.<\/p>\n

Generally, they all start out with the best intentions, but some never make it beyond the starting line while others fail to reap any rewards at the completion of their project.<\/p>\n

In this second part of our property development series I will explain the following three critical points you must understand before undertaking a development;<\/strong><\/p>\n

    \n
  1. What property development is all about<\/li>\n
  2. How to determine if you have what it takes to be a successful developer<\/li>\n
  3. Why you should consider property development<\/li>\n<\/ol>\n

    As we progress through our series of articles, you will learn the essential steps to follow in order to finance your project, manage the risks associated with property development, recognise the perfect site, conduct the all-important feasibility studies and deal with the many dilemmas that can crop up as you go.<\/p>\n

    There is no doubt that the risks of undertaking a development can be great, but the rewards can be even greater.<\/p>\n

    What is property development?<\/span><\/h2>\n

    One definition of property development is\u00a0\u201cthe continual reconfiguration of the built environment to meet society\u2019s needs.\u201d\u00a0\"16096427_l\"<\/em><\/p>\n

    Infrastructure that we take for granted, like roads, sewers, houses, office buildings and shopping complexes don\u2019t just magically appear.<\/p>\n

    Somebody must motivate and manage the creation, maintenance and eventual recreation of the spaces in which we live, work and play.<\/p>\n

    For the purpose of this series, I am going to be focusing on a specific classification of development that is achievable for the \u201caverage\u201d investor contemplating getting their hands dirty.<\/p>\n

    Rather than get into the complex world of high-rise apartments and major developments, we will look at how to succeed with small to medium projects.<\/strong><\/p>\n

    I advise investors to \u201ccut their teeth\u201d on minor undertakings when starting out.<\/p>\n

    Ideally, your first foray into development will be something as basic as completing renovation works on an existing property within your portfolio that could use a bit of updating \u2013 maybe a new kitchen and bathroom, new flooring, etc.<\/p>\n

    From there, you might progress to subdividing a block of land that has an existing house and possibly building another one at the back, followed by demolishing an established home on a larger allotment where the zoning allows for two or three townhouses. \r\n\r\n\r\n

    <\/div><\/p>\n

    In order to be successful at property development; you have to crawl before you walk.<\/p>\n

    Most mistakes are made with the first few projects you undertake, so it\u2019s best to learn from these without having to risk your life savings.<\/strong><\/p>\n

    Ambition is a crucial asset for any property developer, as is the ability to think big, but overconfidence can be your worst enemy.<\/p>\n

    So remember to start out small and learn about the property development process<\/a> with a small project that won\u2019t make or break your entire investment career.<\/p>\n

    It is also important to note that any project involving the construction of four or more dwellings on one site will be considered a \u201ccommercial\u201d endeavour by the banks and can therefore be more complex to fund.<\/p>\n

    Is property development for you?<\/span><\/h2>\n

    Property development is an extremely creative process,<\/a> therefore property developers must be creators by nature. \"38970070_l\"<\/p>\n

    As a developer, your role is to take a project from the conception of an idea, right through all the stages of design and approval, financing, construction and marketing and eventually the leasing or sale of the project.<\/p>\n

    Successful property developers are a bit like movie producers.<\/strong><\/p>\n

    They assemble a highly talented team of people and skillfully lead them to develop a profitable outcome.<\/p>\n

    Developers need to be proactive and make things happen.<\/p>\n

    They must also be creative, flexible and adaptive to take their project through the development maze, not to mention all of the bureaucratic red tape that\u2019s involved with council applications, zoning restrictions and the like.<\/p>\n

    As a developer, you need to work hard, have patience, remain focused and have a burning determination to succeed.<\/strong><\/p>\n

    There are a few key basics you are going to have to undertake as you move along the path towards becoming a successful developer.<\/p>\n

    You must:<\/strong><\/p>\n