We’ve noticed a recent trend in budding developers who are
looking for a simple and accessible overview of the property development
process. It could be because of today’s flat property markets and real estate
investors are looking to manufacture capital growth at this time when there is
slow or no general growth. Are you wondering how you can get started in
property development?
Why Property Development?
Why not? If you get real estate development right, you can
save tons of money and your project could cost around 20% below market value.
You can make large profits and get higher rental returns that can help pay the
mortgage. You’ll even be able to obtain finance easier and achieve greater tax
benefits from the new property! All these allow you to acquire high-performance
properties at wholesale prices, which means capital growth and fewer costs for
you. You could build your property portfolio safer and faster, so why not?
Do you have what it takes to be a property developer?
Property development starts from purchasing land to
developing and building facilities to meet the needs of the community. It can
be building residential development projects, office buildings or even roads.
To be a successful property developer, you’ll need patience,
knowledge, and ambition. While it is highly fulfilling, it’s definitely not a
quick and easy endeavour! As a property developer, you’ll invest and commit
your expertise, talents, and equity to convert land to better use. You’ll need
to educate yourself on the markets, property, finance, economics, construction processes,
town planning, and even marketing of your projects. You’ll make mistakes as you
work your way up, so it might be better to start small.
As a property developer, you’ll need real estate agents,
finance strategists, lawyers, architects, engineers, contractors, strategists,
quantity surveyors, and most importantly, accountants in your team. Property
accountants will help you set up the right ownership structures and give you
the right data to make sound decisions.
Property accountants will help you maximise investment
returns and understand the finance maze. An experienced team can offer you a
predictable and structured approach to property development.
Other important questions to ask before you invest in
property development are if you can afford to undertake this project and if you
can make a worthwhile profit out of it. Find out how much you can borrow and
how you will manage all the costs of the development. We recommend getting a
finance pre-approval first before you start any project.
Financing a property development can be more difficult than
obtaining finance for just a property purchase. Note that a property
development involving more dwellings may be considered commercial, so it might
be more complex to fund. Banks will also look at your track record and would
only lend you 70-80% of the total cost of the development project.
We have barely scratched the surface but we’ll continue this
Property Development Guide on the next one. Make sure to stay tuned as we give
you more tips on how to become a successful property developer – learned from
all the years we’ve dealt with property developer clients. Give us a buzz if
you want to chat about it – otherwise, we’ll catch you later!
Your Outside Team
Our Business Clients
Cam recently caught up with Grant Douglas, owner of Makers Fabrication, to get his perspective on a few things. If you want to chew the fat with Grant further – get in touch and we’ll set it up.
Besides being pretty all-round top blokes, Matt and AJ are bloody screwed on when it comes to growing their business and smashing their goals.
Flick us an email or give us a buzz!
Outside Accounting
Address: Level 2, 182 Vivian Street,
Te Aro, Wellington 6011 New Zealand
Mail: PO Box 24-457, Wellington 6142
Phone: 04 889 2975
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