Jo Chivers is director of Property Bloom, which manages property development.
Leading Property Developer in the Hunter Region
Jo Chivers, Director
Some great advice from Jo.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.