Getting started with property development
11/10/2018 Michael Sheppard, Head of Property Development
Have you ever passed a property development in your neighbourhood and thought to yourself ‘I could do this’? Or perhaps one of your friends has undertaken a development and you think you’re just as capable as them? Despite popular belief, developing property is a serious endeavour; it’s not for the faint hearted. But given the right foundations, it’s an incredibly rewarding opportunity.
The first step to property development is understanding where to start. There’s preparation that needs to be done, decisions to be made, people to contact and money to spend. Fundamentally, you need to understand the different approaches you can take when it comes to developing property. It’s crucially important to kick off from a point that suits your availability, finance, abilities and experience in order to achieve your goals.
The hands-on approach
If you think the hands-on approach is up your alley, you’ll need to wrap your head around a lot more than you think. Before taking any steps, you must educate yourself on property. This includes the markets, economics, town planning, finances, marketing of real estate, construction processes and more.
You also need to recognise and understand the roles of each party involved in the development. Some of these parties include:
- Banks and/or finance brokers
- Insurance brokers
- Real estate agents
- Project managers
- Interior designers
- Town planners and council planning
- Land, geotechnical and quantity surveyors
- Builders and building surveyors
- Project marketers/advertisers
Considering all the people you will be in contact with regularly, strong interpersonal and negotiating skills are a great asset to have.
Taking on a development endeavour on your own is not an easy process, in fact, it’s far from it. If you have little experience in property development, this is not the option for you.
If the hands-on approach sounds enticing, but investing alone doesn’t, entering a joint venture with one or more partners may be the option for you. Be it with family, friends or a co-worker, joint ventures allow you to split the workload, share in the risks and rewards, and combine your resources and experience.
Employ a project manager
With a project manager, you can involve yourself in the development project to the extent that suits you. That being said, you’re employing someone to rely on - they’ve got the reigns. You may or may not like that concept, but there are obvious benefits that come with a project manager; their connections, experience and understanding of the entire process.
Invest in a syndicate or managed investment scheme
If you’re interested in property development, but don’t have the funds to take on an investment alone or among friends, you might’ve looked into investing in a syndicate. Syndicates are groups of investors who need additional capital and resources to undertake their development schemes. They will manage the development and organise the requisite expertise while you sit back and share in the financial risk.
Syndicates get you into the market faster and your risk is diversified. It is more of a passive form of property development and this means you’ll have less control over the process.
Buy shares in a development company
Buying shares in a publicly listed or a private company would be considered the most passive form of property development. It’s a great way to get a peek into the world of development without investing much time into a project.
How we can help
Engaging with a company like The Hopkins Group gives you the opportunity to be involved in the property development process, with the benefit of having a trusted adviser on your side. It combines a bit of each of the methods above to give you comfort in the process.
The Hopkins Group has developed an end-to-end solution to guide you in the development journey – from financial feasibility and site acquisition, right through to build and end sale or ongoing property management.
With nearly 40 years of experience in financial services and property investment, our job is to reduce the risk of being a property developer.
The strength of working with us is that we keep it all in-house and can manage the project for you from start to finish, unlike other service providers who will tap in and out depending on their area of expertise. Our team includes advisers with experience in town planning, design, financial planning, accounting, finance and property acquisition, sub-division and construction. You can have peace of mind knowing we’ll take the stress out of the planning process and explain the details along the way.
We have broken down the complicated process of property development and simplified it into six key stages.
- Planning application
- Return on investment
We have also developed a stringent due diligence process to ascertain whether or not a venture will provide a return on its investment. We want the best for our clients, and will only recommend purchasing a site and proceeding with a development based on certain criteria.
What’s the first step?
As professional advisers, the most important role we can play is to make sure any of your ideas or proposed ventures are financially viable. We can meet with you and discuss your goals and objectives and align them next to your current financial situation. Get in touch with our team today on 1300 726 082 to discuss your property development dreams.
The benefits of becoming a Property Developer
13/03/2019 Jon Archer, Marketing Manager
Thinking about property development? Check out our top five benefits of becoming a property developer and contact an expert at The Hopkins Group today.
Labor's proposed property changes: why investors shouldn't wait to buy
25/01/2019 Michael Williams, Managing Director
Over the last few months it’s been difficult to ignore articles discussing Labor’s controversial plans to scale back negative gearing for investors who buy existing property and halving the capital gains tax (CGT) discount. Michael Williams takes us through these proposed changes and how they could affect investors.
Pets in your rental property – how the rules are changing
18/01/2019 Tannaya Jessop, Property Portfolio Manager
With a slew of changes set to shake up the Victorian Residential Tenancies Act over the next year, Property Portfolio Manager Tannaya Jessop explores the implications of one of the changes making landlords and their agents the most nervous – the new rules around tenants and their pets.