Here’s our latest and final Property Development Guide instalment. If you haven’t read our previous blog, you can read it here.
So, after the pre-purchase stage, contract negotiation and purchase, town planning, development approval, and all that jazz – it’s time to finalise your build plans with your engineer, architect, and accountant.
What’s the role of your architect? Your architect will be involved in town planning, detailed drawings that require coordinating with geotechnical, civil and structural engineers, administration of the building contract and sometimes, supervision of the construction.
Your project will also need engineers and may even need more than one type depending on your build’s complexity. These engineers are geotechnical or soil engineers who will test the soil and determine the conditions needed for your structural engineer to design the foundations or footings of the building. The structural engineers will work on the ground to
develop a cost-effective and functional structural design and work with the architect to consider the weight of materials like steel and concrete, furniture, cars, etc.
For commercial properties, civil engineers will need to design roads, bridges, and systems that can cope with harsh weather situations. For high-rise apartments, hydraulic and fire engineers will need to design pipes for gas, waste, waste, hose reels, fire hydrants and sprinkler systems, among others.
A quantity surveyor will make sure the design stays on budget by cost management and suggesting alternative ideas to other construction approaches to save money. Once all these are done and the plan is final, the next step is to acquire a building permit.
With all the options out there, it can be difficult to choose the one who’s best for the project but one of the best ways to narrow down the choices is through recommendations from family, friends, colleagues or consultants. Be sure to employ only registered practitioners and look for their insurance, including public liability, completion guarantee insurance, etc.
Make sure the builder is capable of building your project by looking at their completed projects and even speaking with their previous clients.
Your contract with the builder should include the price and payment arrangements, project scope, timeline and each party’s responsibilities. Make sure it states that the work would comply, drawings, calculations and specifications according to relevant standard regulations and the steps the parties can take in case of a dispute.
Construction can take a range of time depending on the project’s complexity and size. Payments are often broken down into instalments such as initial deposit, payment at the base stage, frame stage, lock-up stage, fixing stage, and final balance upon project completion. If you have a quantity surveyor, he or she will oversee the progress payments and value changes so he or she can be a witness or arbitrator in case of a dispute. A building surveyor, on the other hand, will make sure the works are in accordance with relevant building standards.
Once the building is finished, you can now submit the subdivision plan to obtain separate titles to refinance and lease your project or hold for a profit. With a trading mentality, you can sell and make a quick buck that you can use for the next project. This is a short-term gain, though.
You will also need to pay taxes, agents commission, etc. If you retain it for a long-term investment, you can benefit from rental yields, good financing options, substantial tax deductions and strong capital growth. Your accountant should be there with you throughout the process.
That’s about it! Hopefully, you’ve gained a bit of knowledge from this guide and can now start planning your property development journey. We’ve been helping property investors and property developers for many years now, so if you’re serious about it, flick us a message or give us a buzz and we’ll help you get started! Speak soon!
Your Outside Team
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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