We receive lots of calls from property investors wanting to talk to us about developing. During our initial chat we discuss their goals and achievements to date with property. Usually we find that most people have at least one investment property, some have several. Some have built a house before but most haven’t. Then we discuss what property developing is like as an experience to see if they think it may suit them.
Property developing is not for everyone and I’ve found that you need to be somewhat flexible, have an open mind and be fairly non-controlling and decisive. Without going into a Carl Jung type personality and psychological analysis, it can be hard to determine if a person is ready to embark on a development. But having entrepreneurial traits will help as things won’t always go to plan.
A good starting point is to ask yourself these questions:
- Do I understand what needs to be done?
- Can I do what’s got to be done?
- Do I have the necessary skills, resources, time, and team support?
- Can I handle risk?
- Can I create real value?
Property Bloom has managed many property developments over the years and as we've progressed, we’ve continually refined our process – with every development comes a new learning and we use this experience to improve what we do. By doing this we’ve been able to save time, money and reduce a lot of the risk.
Here's an example. The other day we reviewing plans for one of our projects and focussed turned to the roof. We came up with a great look using various gables to break up the roof line. Generally speaking, the more detail in the roof design, the more interesting but also the more expensive. We worked out if we used a more simple hip roof, the saving on trusses and roofing materials was substantial. We looked at a design with the hip roof and decided the money was best saved. The saving could be used in other areas that would actually add value like ducted air conditioning for instance.
If you are embarking on a development, due diligence is key. Find areas where there’s good demand and growth indicators with good infrastructure investment taking place. This can indicate planned growth for the area. Then closely track what’s happening in the locations – fundamental research is just as, if not more important as statistical research to us.
Project managing your development involves dynamic relationships between several different parties. Building established and trusted relationships takes time. Your builder will be one of the most important people on your team so ensure they are efficient and build to the highest of standards. You should work closely with them to ensure all is running to schedule.
So if you find you are not set up to develop property and need a helping hand, then consider engaging a project manager who can help mitigate risk by using their tested methods, understanding of the cities and their suburbs they develop in, that can source good development sites and have a team of people ready to get your development off the ground. Perhaps with a positive development experience under your belt, you'll be ready to tackle the next on your own.