The Year of the Dragon. 2012, has the potential to breathe life-shaping fire, to be magical and even mythical.
So as we approach the first day of 2012 under the Chinese Astrology Year – February 4 – we can look forward to a “year of great deeds, innovative ideas and big projects. This will be an advantageous time to begin new projects in business and socially”.
“The Year of the Dragon will bring excitement and big ups and downs in our lives,” according to one online site.
I’m happy to say I’m a Dragon. After reading various overviews, I think it’s a pretty cool sign – I’m told it’s one of the most powerful and lucky signs in the Chinese zodiac. This is the Year of the Water Dragon, with water having a calming influence on Dragons’ fearless temperament, and also making them more perceptive of others. That’s good. This also links into my Pices status. I do love a swim in the ocean!
It’s all fun and games to check in on our horoscopes –I always read mine in the Sunday paper – but really it’s up to you as we move into a new year to set down exactly what you want to achieve and not just leave it to chance, or Dragons, or any other belief.
Property development is like what we can expect this year from the Year of the Dragon: it is exciting, it does bring ups and downs (plenty of those) and hopefully in the end, it’s rewarding.
How can we sure up our property development results? I think it comes down to few simple rules:
- Conduct massive due diligence before you decide to buy. You need to understand exactly what is permissible and what the local market needs in housing. You should understand the local economics, where the employment is coming from and what projects are in the pipeline that can affect your development. You should know the suburb inside out so that when a good deal comes along, you can jump on it.
- Know what the potential outcome should be. Study rents and sales results in the suburb so you know what your dwellings will return/sell for. Put this into a simple feasibility spreadsheet.
- Have a good property accountant who can check over your numbers and advise on the correct structure to purchase under to maximize your tax situation.
- Have your finance pre-approved before you start looking so that you can move quickly to secure a good property.
- Check out local builders, surveyors and tradies so you can quickly set up your development team.
- Negotiate everything; purchase terms, deposit, renovation costs, building costs, agent management fees, etc. Each discount you get will lead to a better bottom line. Be careful not to “screw” your suppliers, as it needs to be a win-win situation for all.
- Project manage your development closely so you can ensure it’s moving along as quickly as possible. This takes lots of time and patience. If you don’t have them, use a professional project management fire (like Property Bloom).
- Consider holding property. It’s my opinion if you go to all the trouble and time to develop property the benefits of holding can be massive, especially in a few years time when you look back and ask yourself, “Why did I sell?”. Of course you need to have a good yield and depreciation benefits to support your holding costs.
So why not take advantage of the Chinese astrology forecast and make 2012 a year of great deeds, innovative ideas and big (property development) projects?