Advice For Property Developers
Setup the purpose of your new project.
The first thing to consider is the goal of your new build project.
Are you developing land intending to build new homes for yourself to live, or for resale, or for investment? The intention from the very beginning will determine how you plan for the design and material, then will have impacts on many of the decisions you’ll make along the way, so being clear from the very start, this will enable the project to run smoothly and successfully.
2. Thorough Due Diligence Study before you start
While Property Development can be quite rewarding, misunderstanding the market can easy cost you a lot. No matter how capable your architect is, how experienced your builders are, how wealthy you are, carelessness of your due diligence study including market and land features can be a disaster.
Before you start, please talk to all your consultants, including the architects, engineers, builders etc, especially have a discussion with your local real estate agent, find the one who understand property development, ask for his advice of what would be the best suitable properties for you.
I sometimes find that some developers spend huge money to build a massive house at an average area,then find it is hard to get the money back. On contrary, someone may build tiny house at the very high end areas which is not appreciated by local purchasers.
3. Funding guaranteed
Property development is never a pleasant experience if you don’t have enough fund in your hand, so always make sure you have fund before you start to get the digger in.
There could be many reasons that cost you to over spent: material price increase, short of labour, poor management, sluggish council response, wrong design, mistakes during construction, unforeseen situation such as Covid-19 etc, any matter may cost you heavily. So always prepare another 10-20% contingency (more than your budget) before you start.
4. The suitability of land for development.
Some people spend a long time looking for the perfect land for their new build project and this can significantly delay their start. More and more developers now purchase land with existing homes; replacing these with new housing – you can often replace one home with three or more new homes to truly maximise your property returns. And it’s often a faster method of securing a site.
Understanding the true build potential of your site will enable you to assess the development options and profit scenarios. Typical factors that can affect a site’s potential include zoning, site contours, overlays and access to utilities.
Ashcroft’s team of experienced Property Development Consultants will be happy to review your site, evaluating its build potential and discussing the various property development options that the site offers.
5. Employ the experienced Project Manager
Developing is a long and exhausting journey, don’t try to do it by yourself if you are new to this industry. Always try to find the most experience project manager to work for you – of course you need to pay him/her, but I bet it is definitely worth of doing so.
Also personal characters of the PM are very important. Hearing from customers who have built with them before will also provide you with great insights into whether this is the right project manager for you.
You do need to prepare a contract and have detailed discussion with your project manager, set up goals and discuss about the procedure if there are any problems.
Communication is key to any successful project so be sure you’ve felt ‘heard’ in your journey with the PM so far, and you have a good rapport with them.
6. Realisation is more important than Profit
For those who want to build and sale, always remember that market changes fast. For example, in Nov 2021, due to the government new introduction of CCCFA and interest increase sharply, real estate market changed from hot to cold within a month. The developer who sale the property in January 2022 should not expect the same price of Oct 2021, when the market was very hot.