30 Questions
What is the primary focus of the fourth instalment of the series on development?
The steps involved in the development journey
What is required for new builds besides the initial planning stage?
Extensive legwork and preparation
What is essential for a property developer to achieve success?
Remaining flexible and adaptable
What is the general flow of the development process?
Rarely completely linear
Why is it essential to manage all aspects of development carefully?
Because of the high cost of making a mistake
What is a key aspect of the development process?
The ability to reposition or renegotiate
What is involved in the development process?
Multiple, complementary stages
Why is flexibility crucial in property development?
Because plans can go awry at any point
What is the general outcome of not managing development aspects carefully?
An extraordinarily costly mistake
What is the relationship between time and property development?
Property development involves extensive timeframes
What is the role of a surveyor and town planner in the development process?
To ensure compliance with rules and regulations
How long may it take to receive Development Approval?
6-12 months
What is the purpose of working drawings and documentation?
To obtain a building permit or Construction Certificate
During which stage do you acquire quotes from prospective builders?
Pre-construction
What is a crucial aspect of being a successful developer in property development?
Being able to handle and thrive under intense pressure and uncertainty
How is the builder paid during the construction stage?
Progressively at the completion of each stage
What is the primary purpose of the pre-purchase stage in property development?
To seek out a block of land or an established house site with development potential
What is the recommended strategy for growing your property portfolio?
Retaining developments as part of your high-growth portfolio
What is the importance of having a team of consultants during the pre-purchase stage?
To assess the viability of the project and provide advice
What happens during the completion stage of the development process?
The project is leased or sold
What should be considered when assessing the market demand in the chosen area?
The type of dwelling that would sell or lease well
How long can the construction stage take?
Depending on the size of the project, between 6 and 12 months
What is the purpose of a pre-purchase feasibility assessment?
To assess the viability of the project and determine the land's worth
What is the purpose of the pre-construction stage?
To acquire quotes from prospective builders and secure bank approval
What is the primary focus of the concept stage in property development?
Coming up with a concept for the project
How long can the working drawing and documentation stage take?
3-4 months
What is an important consideration when designing a project during the concept stage?
Maintaining the traditional nature of the area
What should be included in a pre-purchase feasibility assessment?
All costs including consultants and construction, as well as likely end sale values
What is the primary purpose of the purchase stage in property development?
To buy the land at a price that allows for commercial profit
What is the role of the architect during the town planning stage?
To draw up plans that fit in with the relevant state planning codes
Study Notes
Property Development Process
- The property development process involves 8 stages: pre-purchase, concept, purchase, town planning, working drawing and documentation, pre-construction, construction, and completion.
Pre-Purchase Stage
- Involves seeking out a block of land or an established house site with development potential.
- Important to have finance in place or know borrowing capacity to determine what can be developed on the site.
- A team of consultants, including a development manager, solicitor, architect, surveyor, town planner, and estate agent, should be organized to advise on project viability.
Concept Stage
- Involves assessing the local council's development and planning policies to determine what can be constructed on the site.
- Market demand in the chosen area should be gauged to design and build a project with optimal marketability.
- Neighbourhood character and local council's town planning requirements and regulations should be considered.
- Sketches of the proposed site should be created, considering setbacks, driveways, private open space, garages, and parking spaces.
Purchase Stage
- Involves buying the land at a price that allows for a commercial profit.
- A pre-purchase feasibility assessment, including time scales, costs, and end sale values, should be conducted to determine the land's worth.
Town Planning Stage
- Involves drawing up plans that fit with relevant state planning codes and local council development guidelines.
- A surveyor and town planner are typically involved at this stage.
- Development Approval can take up to 12 months.
Working Drawing and Documentation Stage
- Once Development Approval is received, the architect and engineer document working drawings to obtain a building permit or Construction Certificate.
- This stage can take about three to four months.
Pre-Construction Stage
- Involves acquiring quotes from builders and obtaining bank approval for the development loan.
Construction Stage
- Involves building the project, paying the builder progressively at each stage using drawdowns from the bank loan.
- This stage can last between six and twelve months, depending on the project size.
Completion Stage
- Involves leasing or selling the completed project.
- Retaining the development as an addition to a high-growth portfolio and borrowing against its end value can help grow a portfolio and wealth over the long term.
Learn about the property development process from start to finish. Understand the stages involved and the legwork required to succeed in the industry.
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