This week I met with a lovely couple wanting to understand more about property developing and if it was the right strategy for them.  They asked a simple but very good question which is relevant for anyone looking to take their first steps into property development.

They wanted to know what the main risks were in developing property.

I think most people understand there can be risks associated with any investment whether it be buying shares (to me the volatility of the share market is scary), even putting your money in the bank in some countries (particularly Greece!) can be risky. In Australia, our banking system is very stable but the return on cash term deposits is hardly worth the effort right now.

I received a call from a novice property developer the other day and thought I'd share his dilemma.

He'd purchased a duplex site and had just received a set of plans and had a builder quote on the plans. He couldn't understand why there was so much allowed for in "site works". 

I looked over his quote for him and could see that his builder hadn't itemised out many costs.  Our builder's quote or tender has about 75 itemised inclusions.

What a hoo-ha we experienced this week with Treasurer Hockey's comments when he dismissed suggestions that property in Sydney was unaffordable when he went on to say "If you've got a good job and it pays good money and you have security in relation to that job, then you can go to the bank and you can borrow money and that's readily affordable."

and "...if housing were unaffordable in Sydney, no one would be buying it," he said.

Over the years I've refined the fittings and fixtures that we include in our villas. When we first started off many years ago, we'd just run with the basic builder's range.

When I look back on the fittings in the basic builder's range I'm horrified. You see, the basic range is usually selected by the builder. The builder is very good at building homes but may not have a very strong sense of style. Large building companies will usually employ interior designers to make selections but if you are using a smaller building company, double check their fittings and fixtures