This week we did a little back flip on a development project and I thought I'd talk about what to do when things don't necessarily go your way.

Property Bloom had found a wonderful property for our clients well located right in the CBD of this town. The project would eventually end up as a three unit development which would include the existing house. Our plans are to renovate the house (which we have now completed) and build a duplex (two attached dwellings) behind the house. It's termed 'three unit' by council as when you lodge your Development Application (DA) they assess the house as one of the units.

We had a few options to explore on this before we lodged our DA. The property backed onto a laneway which for all purposes is used as a road. It's bitumen sealed with kerbing and used mainly by retailers for deliveries and to access the shopping centre nearby.  We met with council with the proposal to face the duplex to the laneway and have direct vehicle access onto the laneway considering it's condition. Mostly laneways in this suburb are gravel tracks unsealed with no kerbing or drainage.

A few weeks after an over the counter meeting at council, we finally received feedback from the town planner we'd met with. She explained that council probably would not support vehicle access to the laneway as they didn't want to set a precedent. Whilst disappointing, we switched to our back-up plan of a 'battleaxe' style development with vehicle access from the road. This is more costly due to the long driveway. There were also added costs to fill and retain the rear of the site to get the right fall for the stormwater to drain to the street.

We lodged the DA and received a letter from the planner requesting some ridiculous changes around our stormwater drainage. Without going into all the detail, it would have a big impact on costs.

I pondered over this for a few days, we can argue and fight but thinking about this particular site and its location and my client's goals, which are to build their investment portfolio and create as much equity as possible in the process.

I set up a meeting with our clients to present an idea I had. Our DA is still in council, but I wanted to present another development strategy to them. The strategy included withdrawing the DA and building a granny flat on their property. The granny flat tenants are allowed to use the laneway for access and so we could have it completed quickly - within three months - and their yield would be increased. Then, to replace the equity creation that the three unit project was to deliver, I presented a dual occupancy project to them on land we'd just located. This project would actually create more equity than we estimated the three unit project would for them.

They were happy to change tack. But we are still investigating whether we complete the DA and then they sell the property in a few years time with a DA approval in place or whether they proceed with the granny flat construction. Either may have good outcomes for them.

So when an unexpected hurdle pops up, it's important to investigate other options and not just stay with the original plan for the sake of it. By looking at a different project to deliver one of their goals, we are still fulfilling the goal of building a portfolio. There can be many hurdles to jump as property developers but sometimes investigating a different path is better than trying to jump a hurdle that keeps moving.