Property developers are a diverse bunch, coming from all corners of life. Many of them share common characteristics like grit, determination, and commitment. However, to master the art of property development, particularly in the competitive Melbourne market, stretching from the suburbs of Ashburton to the outskirts of Croydon, developers will need more than just a strong work ethic and a dream.
Success involves understanding the market value and knowing how to pick an investment winner, with an eye not just on the present but on the future too. It also calls for gathering a seasoned, dependable team working in the same direction with a shared vision for the project. Crucially, it requires building a watertight property investment plan with accurate budget estimates and project schedules. Lastly, you’ll need a thorough grasp of the local market, not just what its current state is but also how changes in the area and neighbouring industries could reshape its future.
We’re giving you a leg up by sharing the top four elements that can make or break a townhouse property development. Nail these and you’ll be well on your way to financial freedom.
1. A Good Development Site at an Affordable Price Point
As a developer of a multi-unit property, your goal should be to nab a property or piece of land below its market value because this sets you up nicely to pocket a tidy profit from your development. If you pay too much for a site, you’ll have to tighten the purse strings elsewhere in your budget, compromising the quality and potentially lowering the resale value
You need to know your way around the local market to sniff out the perfect property investment. Getting a feel for emerging suburbs and areas will help you get the best bargain. Plus, it’ll give you the knack for spotting potential others might miss. By getting to know Melbourne’s eastern suburbs, their property markets, and the broader economic lay of the land, you’ll be in a solid position to anticipate trends over the lifespan of your development project. A lot of developments run for one to two years, so understanding forecasts for the market within this timeframe will ensure you’re well-prepared to make a solid investment.
2. Building a Reliable Construction and Development Team with a Unified Vision
Creating a successful multi-unit property development requires a tight-knit, dedicated team working towards a shared goal. If your entire crew is on the ball from day one, your odds of hitting the jackpot increase. When you select your builder, go for specialists that have experience in property development and understand the market . This is your golden opportunity to benefit from others’ past experience and niche expertise, using it to lay a sturdy foundation for your development project.
Then, you have to take the time to ensure each team member grasps your objectives and has the same end goal as you. Having a common goal will keep everyone working in the same direction throughout the development’s lifespan. The most critical element to pay attention to when you build your team is to choose people who instil confidence and communicate clearly with any stakeholders and yourself. Nothing can destroy a construction project faster than poor communication. That’s why you must look at every potential team member you hire, ensuring they have a solid track record of success in the property development game.
Also, it’s critical to lay down clear rules for communication from the start. This way, everyone’s clear on what’s expected from the outset, helping you dodge costly misunderstandings later in the project. Establishing a solid team, clear goals, and efficient communication channels will ensure a cohesive working environment where everyone knows their role and strives for the same outcome. This collaborative approach is not just a nice-to-have; it’s crucial to delivering a successful property development project.
So, remember to invest your time and energy into building and nurturing a top-notch development and construction team that shares your vision. You’ll be glad you did when you see your project coming together as you envisioned.
3. A Solid Timeline and Budget
Most multi-unit developers have the eye of a visionary. They look at empty land or lots and see the ‘as is’ and the ‘could be.’ But the real champions in property development are also precise planners who can attach a budget for construction to a development project and keep it from spiralling out of control. This knack for precise forecasting gets honed with experience and on-the-job learning. So, if you or your crew lack this experience, seek out a group of experts before setting a budget for your project, or you might pay dearly for your financial missteps later.
For your development to succeed, you need to know your figures like the back of your hand and stay as close as possible to them throughout the project. What’s your budget for construction? What’s your timeline? Do you have a backup plan? What’s your exit strategy if you need one? The more spot-on your investment plan is from the start, the better your odds of striking gold. So, don’t be shy about investing a decent amount of time into getting it right.
4. Understanding the Local Market
Your development venture’s success or failure hinges significantly on your knowledge of the local market. This means comprehending multi-unit property buyers’ present needs and predicting how they might shift their needs in the future. For instance, if you pick a lot in the suburban areas of Croydon, near a university, you might see a need for 2 bedroom units s because there is a large student population. On the other hand, larger townhouses could be the hot ticket if you plan to develop something in an emerging suburb like Bayswater or Forest Hill.
So, you must spend time doing research on any local markets you’re keen on breaking into. Keep your finger on the pulse of new and proposed multi-unit properties, the area’s infrastructure and anything that could sway future property trends, demographics or demand.
Another vital piece of the puzzle is to know what similar properties in the area have recently sold for. This will help you get a solid ballpark of what you should be prepared to spend. Keep yourself updated on local development codes and council laws to fully grasp the opportunities that could be up for grabs when it’s time to buy the location for your multi-unit property development.
Setting Yourself Up for Multi-Unit Development Success
Brilliant high-density property developments don’t just occur out of the blue. They’re born out of robust planning, a solid process, and, most vitally, the right team on board. We’ve been planning, designing, and building Melbourne’s property developments for decades. We understand that there are once-in-a-lifetime opportunities available to new and experienced property developers and how to unlock maximum local market value. Plus, we’ve got strong ties with town planners and local councils that can reinforce your property development pursuits.
Contact us to discuss your real estate development project. We can provide a thorough property development service, whether you have your sights set on Melbourne’s inner-eastern suburbs, like Ashwood, Ashburton and Burwood, or are casting a wider net to areas ranging from Kilsyth to Chirnside Park. From property acquisition and feasibility studies to design, construction, and subdivision, we’ve got you covered.