Property Development 101

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Questions and Answers

What is the primary focus of the fourth instalment of the series on development?

The steps involved in the development journey (correct)

The role of property managers in development

The benefits of passive property investment

The importance of soil quality in development

What is required for new builds besides the initial planning stage?

Extensive legwork and preparation (correct)

Minimal legwork and preparation

No preparation at all

Only site preparation

What is essential for a property developer to achieve success?

Ignoring potential problems

Following a rigid plan

Having a single, fixed timeline

Remaining flexible and adaptable (correct)

What is the general flow of the development process?

Rarely completely linear Signup and view all the answers

Why is it essential to manage all aspects of development carefully?

Because of the high cost of making a mistake Signup and view all the answers

What is a key aspect of the development process?

The ability to reposition or renegotiate Signup and view all the answers

What is involved in the development process?

Multiple, complementary stages Signup and view all the answers

Why is flexibility crucial in property development?

Because plans can go awry at any point Signup and view all the answers

What is the general outcome of not managing development aspects carefully?

An extraordinarily costly mistake Signup and view all the answers

What is the relationship between time and property development?

Property development involves extensive timeframes Signup and view all the answers

What is the role of a surveyor and town planner in the development process?

To ensure compliance with rules and regulations Signup and view all the answers

How long may it take to receive Development Approval?

6-12 months Signup and view all the answers

What is the purpose of working drawings and documentation?

To obtain a building permit or Construction Certificate Signup and view all the answers

During which stage do you acquire quotes from prospective builders?

Pre-construction Signup and view all the answers

What is a crucial aspect of being a successful developer in property development?

Being able to handle and thrive under intense pressure and uncertainty Signup and view all the answers

How is the builder paid during the construction stage?

Progressively at the completion of each stage Signup and view all the answers

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 Signup and view all the answers

What is the recommended strategy for growing your property portfolio?

Retaining developments as part of your high-growth portfolio Signup and view all the answers

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 Signup and view all the answers

What happens during the completion stage of the development process?

The project is leased or sold Signup and view all the answers

What should be considered when assessing the market demand in the chosen area?

The type of dwelling that would sell or lease well Signup and view all the answers

How long can the construction stage take?

Depending on the size of the project, between 6 and 12 months Signup and view all the answers

What is the purpose of a pre-purchase feasibility assessment?

To assess the viability of the project and determine the land's worth Signup and view all the answers

What is the purpose of the pre-construction stage?

To acquire quotes from prospective builders and secure bank approval Signup and view all the answers

What is the primary focus of the concept stage in property development?

Coming up with a concept for the project Signup and view all the answers

How long can the working drawing and documentation stage take?

3-4 months Signup and view all the answers

What is an important consideration when designing a project during the concept stage?

Maintaining the traditional nature of the area Signup and view all the answers

What should be included in a pre-purchase feasibility assessment?

All costs including consultants and construction, as well as likely end sale values Signup and view all the answers

What is the primary purpose of the purchase stage in property development?

To buy the land at a price that allows for commercial profit Signup and view all the answers

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 Signup and view all the answers

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.

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Description

Learn about the property development process from start to finish. Understand the stages involved and the legwork required to succeed in the industry.