4 essential elements that can make or break a property development.
Property developers come from all backgrounds and walks of life. Many share certain traits, such as resilience, drive and dedication. However, to create a truly successful high density property development, you need more than a great work ethic and a vision – especially in the competitive Melbourne market. This includes the suburbs we develop in, from Ashburton and Ashwood, through Vermont and Mitcham to Mooroolbark and Croydon.
It takes an understanding of market value and knowing how to spot a good investment, and not just now but into the future. It also requires the assembly of an experienced and reliable team that are united around the same development goals and have an understanding of the long-term vision. Equally important is the ability to create a precise and airtight property investment plan that contains accurate budget figures and project timelines. Lastly, you need to have a comprehensive knowledge of the local market – not just what it looks like now but how changes to the area and surrounding industries could alter what it looks like in the future.
Here, we cover the top four factors that determine the success of a townhouse property development. Get these right and you’re well on your way to financial freedom.
- The right development site at the right price
As a multi-unit property developer, your aim should be to buy a site below market price, this will put you in the best stead to make the most profit from your development. Overpay for a site and you’ll be forced to trim costs in other areas of the budget, which could bring down the value of your future townhouses or apartments.
To find the perfect property investment you need to know where to look within the local market landscape. A better understanding of up-and-coming suburbs and regions will help you score the best deal. This will also equip you with the ability to see potential that others may not immediately see. By familiarising yourself with Melbourne’s eastern suburbs, property markets and broader economic landscape, you’ll be better placed to predict trends over the life of your development project. Most property developments have a life span of one to four years, so an understanding of market forecasts within that period will ensure you’re best equipped to make a sound investment.
- A trustworthy development & construction team with a shared vision
It takes a strong and cohesive team united around a shared vision to build a successful high density property development. If everyone in your team is on the same page from day one, your chances of success will skyrocket. When hiring developers and builders, look for people with expert knowledge in multi-unit property development construction and high density building design. This is your chance to capitalise on other people’s past experience and specialist expertise, and leverage it to build a solid foundation for your own development.
It’s then critical that you put in the groundwork early on to ensure they understand your goals and share your vision. This mutual understanding will ensure the whole team is striving towards the same things throughout the duration of the development. What’s most important of all when it comes to building your team is choosing people that communicate efficiently and install you and all stakeholders with confidence. Nothing sinks a construction project faster than poor communication. For this reason, vet every single person you hire, ensuring they have a proven track record of success within the property development industry. It’s also important to implement clear guidelines for communication in the very beginning, that way everyone has an understanding of expectations from the get-go, which will avoid costly ‘crossed wires’ in the long term.
For more tips on laying the foundations for a strong property development project team, read our post: Choosing the right builder for your property development.
- A clear timeframe and budget
More often than not, high density property developers are visionaries. They don’t just see a vacant lot for what it is, they acknowledge the broader picture of what it could be. However, the best property developers are also meticulous planners who can affix a construction budget to a development budget and ensure it doesn’t blow out. This level of forecasting precision is carefully fine-tuned over years of experience. Which means if that’s something you don’t have (within yourself or your team), ensure you consult with a suite of experts before determining your project budget or else you could be footing the bill for your own financial miscalculations in the future.
For your property development to be successful, you must know your numbers and stick to them. What’s your construction budget? What’s your timeframe? What’s your contingency plan? What’s your exit strategy? The more precise your property investment plan is from the beginning, the greater your chances of success. So don’t be afraid to spend a sizable chunk of time ensuring its accuracy from the start.
- Knowledge of the local market
The success of your development will depend largely on how well you know the local market. That means understanding the current needs of high density property buyers and anticipating how these needs may change in the future. For example, if your site is in the suburbs of Burwood or Croydon, close to a university, there may be a demand for dual occupancy apartments due to the high density of students in the area. However, if your development is in a growing suburb, like Boronia, Forest Hill or Bayswater, townhouses may be more sought after. For this reason, it’s really important that you invest time into researching the local markets you’re interested in entering. Keep abreast of new and planned developments and infrastructure in the area, as well as anything that might influence future demographics, demand or property trends.
Another thing to be across is how much similar properties have sold for nearby. This will give you a good indication of what you can expect to pay. In addition, stay up to date on local council laws and development codes in order to understand the full scope of opportunity open to you when it comes time to purchase the premises for your own high density property development.
Give yourself the best chance for success at multi-unit development
Great multi-unit property developments don’t happen by accident. They require a solid plan, a clear process and, most importantly, the right people. At Costas Constructions, we’ve planned, designed and built property developments in Melbourne for more than two decades. We understand the unique opportunities open to property developers like yourself and how to maximise value for the local market. We also have strong connections with local councils and town planners that can help strengthen your own property development.
Get in touch to talk to us about your property development project. Whether you’re looking to develop in the inner eastern suburbs of Melbourne such as Ashburton, Burwood and Ashwood or the outer suburbs such as Kilsyth, Croydon or Chirnside Park, we can provide a full property development service, from feasibility, property purchase, through to design, construction and subdivision.