How to get started in property development

I’ve recently noticed a trend in budding developers – they are looking for an overview of the property development process and they want it in a simple and accessible way.

That is why I’ve created this comprehensive guide covering the topic.

I want to make finding the right information as easy as possible.

If you’re in a hurry you can just click sub-topics below and conveniently jump to information that’s relevant to you.

Why Property Development?

Getting Started – Who to Talk To

The Cost of a Project and its Profitability

The Process

What to Do with Your Completed Development Property

Why Property Development?

When you become a property developer, you:

  • Save money – your project could cost 20% below market value
  • Make money – you could make large development profits
  • Get better rental returns – which helps pay the mortgage
  • Obtain easier finance – on completion giving you better leverage
  • Achieve great tax benefits – from new property

Becoming a property developer allows you to acquire high performance properties “at wholesale” (with built in capital growth)  and ones that are cheap to own.

This helps you build your property portfolio faster and safer than the average investor.

What is Property Development?

Property Development involves a wide range of activities and processes from purchasing land to building and developing facilities.

One definition of property development is “the continual reconfiguration of the built environment to meet society’s needs.”

While this can be anywhere from roads to high-rise office buildings, this article will discuss a specific segment – the “average” investor working on small to medium-sized residential development projects.

What’s required of a Property Developer and why get into Property Development?

In order for a Property Developer to be successful, need to have the ambition and patience that the process requires.26036910_l

They also need more knowledge than they may think – there’s things the already know, things they know they don’t know, but as soon as you get into your first project you’ll also stumble on lot’s you didn’t even know you didn’t know!

As a developer, you’re an investor committing your equity, expertise and talents to convert land from its current use to a higher and better use.

So you’ll need to educate yourself on property, the markets, economics, finance, town planning, the construction processes and the marketing of real estate projects.

Some of this you can learn by doing your homework and other lessons you’ll learn along the way.

In order to be successful, you need to start small and work your way up.

Most of your mistakes will be made with your first few projects so it is important to start small so you don’t ruin your property investment career before it has even begun.

Download our FREE special report for a printable PDF available for your convenience and later reading. It offers information on topics from property renovations to the property development process, plus much more. How To Get Started In Property Development. Get your copy now.

How to get started in property development


Getting Started – Who to Talk To

Who should you be talking to now

O.K.- you’ve decided that Property Development is a smart choice for you and you’re ready to start discovering your options.

So who should you be getting in contact with?

Who will tell you everything you need to know and offer direction?

Depending on the complexity of the project, you may need only some or all of the following team members:

  • Real estate agents – but remember their job is really just to sell you a property, they really can’t even give you sound advice on the “developability” of the property – it’s up to you and your team to determine that.
  • Finance strategists to get you development finance – this is very different to investment finance
  • Accountants – to help you set up the right ownership structures
  • Lawyers – to help with all the contracts
  • Town planners and Urban designers
  • Architects, designers or draftsmen
  • Engineers – civil, structural, traffic, acoustic, environmental specialists
  • Landscape architects
  • Building contractors
  • Project marketing specialists
  • Development managers
  • Project managers
  • Construction managers
  • Property StrategistsThis may be your most important point of contact. The role of a Property Strategist is to help a property developer research, locate and negotiate the purchase of property; maximise investment returns through property investment management, and understand the finance maze. A great place to start is with Metropole Property Strategists – where the experienced team can offer a more structured and predictable approach to property development.

Get in contact with a Property Strategist from the Metropole team by clicking here.

We’re currently project managing over 50 medium density development projects for clients. Metropole provides a complete Project Management service that allows you to secure high-performance properties so you can take advantage of the benefits only available to property developers.

The Cost of a Project and its Profitability

This is one of the most important aspects to consider before you invest in developing property.

The crucial question to ask is – can I afford it and will I be making a worthwhile profit?21743109_l

Before you commence any development project, it is obviously crucial to first establish how much you can borrow and how you will be able to manage all associated costs of the development.

That’s why always recommend you have finance pre-approval in place before you get started.

This way you know your limits are and how much you can actually put towards developing a property.

Financing a property development is more difficult than obtaining finance for a simple investment purchase.

When approaching banks and lenders you have to remember that they have their own safety to consider when deciding whether or not to finance your development venture. They will want to establish the track record of both you and the people on your team.

It is also important to understand that any project involving the construction of four or more dwellings on the one site will be considered a commercial endeavour by the banks and can therefore be more complex to fund.

Lenders will usually allow developers to borrow up to 70-80% of the total cost of the “hard costs” of the development project – not the end value of the project.

And they often won’t lend money for the “soft costs” – things like architect’s fees, Council fees, other consultants and purchase costs.

What this means is that your loan to value ratio for a development is significantly less is than that for a buy and hold investment property.

The bottom line is that you need quite a bit of money saved up to start off with.

By the way…development loans are offered in staged payments finalised at the end of each building stage. These include the deposit, base stage, frame stage, lock up stage, fixing stage, balance of development funds supplied on completion of the project.

Creating a Concept and Determining Feasibility

48226298_lAs different councils have different, and usually strict, guidelines in terms of what can be developed in their municipality – it’s important to understand the principles of town planning and how each Council interprets the overall development code for your State to suit their own local neighbourhood character.

This means it’s important to do your research before buying land. Remember, real estate agents’ primary job is to sell property, so don’t rely on them for advice on what you can build on a particular property.

Instead consult the town planner or a proficient architect to determine what you can do with a particular site.

Don’t fall into the trap of looking at existing developments in the area and thinking that you could built something similar today – they may have been approved under old town planning regulations.

So some of the important questions to ask are:

  • What can I put on this property – what is its highest and best use?
  • How many units?
  • How big will they be?
  • What restrictions are there?
  • Are there overlays, easements or covenants on the title restricting its development potential?

Things to consider when looking for site with development potential:

Securing the “right property” is critical for the success of any investment property.

Acquiring a piece of real estate that ticks all of the right boxes according to your investment strategy and long term goals is of paramount importance.

Of course when it comes to property development, site selection is even more critical as a large portion of your profit margin will be determined when you buy the property.

Sourcing good development sites is all about knowing your market and I don’t simply mean having an understanding of the many property markets out there, but the bigger economic picture as well.

Because a development project has a life of at least one year, and more frequently two to four years, if you want to be a successful developer you need to inform yourself about not only the property markets, but economics in general.

Then you will need to make an educated decision about where you think the markets are heading over the next few years.

As always…location is critical when it comes to selecting the best site.

Properties in prime locations will sell and lease far better than secondary locations, even in bad times when the market is doing it tough.

This could mean you’ll need to invest 15-20% more for land, but ultimately you’ll receive greater profit margins.

You also need to do your research and determine the type of property use people in that area want.

For example, if a suburb consists of an older demographic, single story townhouse may be more suitable than double story dwellings. If the area is popular among families, you might consider building more bedrooms and choosing a location close to schools.

Another critical piece of research prior to purchasing a property is undertaking a detailed feasibility study to determine how much profit (if any) your project will make.

Just to make things clear… Just because you can developer site doesn’t mean it is financially feasible to do so.

One of the reasons so many property developers go broke is that they buy with their heart (their emotions) and don’t complete a property comprehensive development feasibility.

Just like any new business venture you need a business plan, weigh up the pros and cons and crunch the numbers to ensure there will be a profit.

Sure your initial feasibility study will be rough and have many assumptions, but it should give you a reasonable guideline if you include:

    • The purchase price, purchase date and settlement. Stamp duty on the purchase.
    • Your equity in the project which will then determine the size of the borrowings required and interest payable (a word of warning – this is a big one. Your interest cost is likely to be a six-figure sum.)
    • Conveyancing and legal costs.
    • Consultant’s costs, such as architects, town planners, engineers, project managers and surveyors.
    • Construction costs.
    • Rates and taxes are self-populating based on the properties values.
    • A contingency amount (many inexperienced developers unfortunately leave this out.)
    • Income from sales and rentals.

The Processproperty development process

  1. Pre Purchase Stage

icon1This stage is where the developer investigates properties based on their finance pre approval.

This is also the stage where you develop the concept for the site you’re considering as well is conducting a feasibility study.

During this time the developer should be consulting some of their expert team.

Generally, the following services will be required in order to accurately assess the feasibility of the site:

It’s also a good idea to touch base with the planning department at the local council.

This department can provide you with an overview of any future planning or zoning changes in the area, which could limit your development in the future.

What you consider a relatively straightforward application, can sometimes be held up in council for over a year due to seemingly minor issues.

A good town planner working in conjunction with your architect, should forewarn you of any possible points of objection from neighbours. With this insight, the town planner and architect will coordinate a design that has greater potential for faster council assessment.

Above all, once you’ve found that perfect block and carefully researched any restrictions, act fast.

If it really is the perfect site for developing, the chances are another developer has their eyes on it too. Don’t allow procrastination to get in the way of a good deal and a great opportunity

  1. Negotiating Contracts and Purchasing

icon2This is the stage where land is bought at a price that allows the developer to make a commercial profit.

You should be thinking about how much you’re willing to pay and the end value of the dwellings at the end of development project.

Negotiating a price is best left up to the expertise of a buyer’s agent (one who understands the development process well.) Don’t take a shortcut here as the fee a property buyer charges is often covered by the savings you’ll make with the better negotiated price.

  1. Town Planning and Development Approval

icon3At this stage your architect draws up plans to fit in with planning regulations according to council development guidelines. This stage can be complex so this may also require the input of a Town Planner.

The role of a Town Planner includes offering feedback during the design process, writing the development application, handling further requests, objections, cases in the appeals court.

Find out more about what enlisting the help of a Town Planner here.

You’ll also require the services of a Land Surveyor who will establish the title boundaries of your property, conduct a survey of the neighbourhood properties and how they will impact on your proposed development, consolidate a number of titles into one title for you if you have bought more than one block and draw up a plan of subdivision.

  1. Working Drawing and Documentation

icon4Once you obtain a development approval your plans stage is where plans for the build are finalised and will require the involvement of a number of consultants including an Architect and an Engineer.

 

 

The role of the Architect

Architects are the creative designers of your project but they can also do a lot more your development process.

The three essential parts to the architect’s role are:

  1. Town planning,
  2. Preparing working detailed drawings which also requires coordinating necessary consultants such as geotechnical, structural and civil engineers. And…
  3. Administrating the building contract. Preparing The architect may also assume responsibility of administrating the building contract and supervising of the construction.

Find out more about working with an Architect here.

behind a building but they also have to work closely with engineers in order for your build to be structurally sound. Depending on the complexity of the build you may require more than one type of engineer.

At this stage you may need a consult different types of Engineers including:

  • Geotechnical or Soil Engineers – who test the soil to establish the conditions necessary for a structural engineer to design the footings or foundations of the building
  • Structural Engineers – who work above the ground to develop a structural design that is both functional and cost effective. They work with the architect considering the weight of materials (eg. concrete and steel), furniture, windows, cars and many other factors.
  • Civil Engineers – design the roads and bridges. For a residential property this role may not be necessary but civil engineers will design systems to help cope with heavy periods of rain and retain water onsite slowly allowing it to seep through into the council’s assets.
  • Hydraulic & Fire Engineers – work on high rise apartments or commercial buildings that will require design for pipes for water, gas, waste as well as fire hydrants, hose reels and sprinkler systems.

Find out more about the different engineers and who you should be working with here.

The role of the Quantity Surveyor

While the architect and engineers make your building look good and make sure it will actually stand up, they have little consideration for the cost of your build.

During the Design phase the Quantity Surveyor or QS – not to be confused with a Land Surveyor –  will ensure the design remains on budget through cost management and suggest alternative ideas to other approaches in the construction to save money. A QS isn’t usually required for small developments, but for construction costs that exceed $2 million lenders often require a report from a QS.

Once everyone on the team is happy with the plans (the developer included) obtaining a Building Permit is your next step. This process can take a month or two.

  1. Pre Construction

icon5Now it’s time to obtain quotes from builders and finance for your project.

How do find the right builder

Finding the right builder can be daunting.

There are so many options out there making it difficult to know who is best for your project.

One of the best ways to find reputable builders for your development is through recommendations.

These recommendations may be from friends, family, colleagues, or even your architect or development manager (who may know best because they work on developments all the time).

Only employ a registered building practitioner and be sure to request a copy of all the builder’s insurance certificates prior to hiring them for the job – this includes public liability insurance that notes you and your job as being covered for an amount of $10,000,000, WorkCare insurance and completion guarantee insurance.

Above all, look for evidence that the builder you are considering is able to deal with the type of project you are proposing. Determine this by visiting previous projects completed by them and speak with their previous clients to make sure they can deliver on promises.

Builder’s Contract and Specifications

The contract should include overall terms agreed to by you and the builder, including the price and payment arrangements; outline the scope of the project, who is involved and what each party is expected to do to support the other (providing access to the site, providing accurate working drawings, etc).

It should explain what will happen in the event of a dispute between the developer and builder and incorporate a time line that has been agreed to by both parties into the contract.

It will also state that work is to be done in compliance with specifications, drawings and calculations to comply with the relevant building regulations.

Read more about the Pre Construction stage in the 19-part process series:

Digging in the Dirt

Preparing the Site

  1. Construction

Building has now commenced and you’re well on your way to completion.icon6

Do bear in mind that the construction phase can take anywhere from six to twelve months depending on size and complexity. You should also account for poor weather and other disruptions to building time.

Paying your Builder

Paying builders throughout construction and the specifics of this will have been included in the contract.

Payments are usually broken down into six instalments:

  1.  An initial deposit to confirm acceptance of the contract and commence construction,
    2. A payment at the end of the base stage,
    3. A payment at the end of the frame stage,
    4. A payment at the end of the lock up stage,
    5. A payment at the end of the fixing stage,
    6. Final balance on completion of the project.

If a Quantity Surveyor has been involved in the project, they will oversee these progress payments at regular intervals. During construction the QS will also value changes or variations or additional works required and if disputes arise, the QS is called on as an expert witness or as an arbitrator.

At various stages of the building project a building surveyor will need to certify that works have been completed in accordance with regulations and to specified building standards.

  1. Completion

icon7Now you almost done, the building is finished and your project almost complete.

This is the time to submit the plan of subdivision to obtain separate titles for each dwelling and to either refinance and lease your completed project and hold in the long term (my preferred strategy) also your project for a profit.

 

What to Do with Your Completed Development Property

Essentially, you have two main options:

  1. Selling your newly built development for a profit or
  2. Holding on to it as an investment property.

But which is the right option? There isn’t really any right or wrong answer. It is dependent on the developer and their circumstances.

Selling the Development

12636910_lMost developers have a “trading mentality”  – developing for short-term profits rather than long-term asset growth.

The advantages of selling your completed development is that you’ll make a profit straight away, pay off the development loan quickly and be able to move onto your next project with a bit more experience and money up your sleeve.

The disadvantage to this method is that there is no potential to make more from the property – it’s a short-term gain.

Apart from paying tax on your development profit you will also be required to pay GST (Goods and Services Tax), selling agents commission and stamp duty on your next purchase, significantly eroding your profit margin.

Retaining your project as a long-term investment.

The advantage of holding onto a completed development is that it becomes a long-term investment.

You also benefit from:

  1. Higher rental yields as the tenant pays you retail rents (not knowing that you your investment property wholesale.)
  2. Great financing options – on completion of your project the bank should refinance your property based on its market value (which should be considerably more than what you paid for it) allowing you to withdraw a substantial amount of your funds used for the development.
  3. Substantial depreciation allowances – meeting your property should the tax effective.
  4. Strong capital growth – because you bought in a great location – didn’t you?

Putting this together means you have a high growth high yield investment property that is cheap to hold on to.

Who could ask for more?

Relevant Resources:

Making Your Money

At The End of your Development

Hopefully, you’ve learnt something from this comprehensive guide and are now well equipped to start thinking about your own property development goals.

Your next step should be to read my FREE special report – How To Get Started In Property Development  – click here now and get your copy.

How to get started in property development

If you’re serious about getting involved in property development, why not have a chat with Australia’s leading development Project manager – the team at Metropole Property Strategists. We have been helping ordinary investors become property developers since 1998.

Click here now to find out how you can get started in property development.



Want more of this type of information?


Bryce Yardney

About

Bryce is a property development specialist, having successfully completed many development projects for Metropole's clients. Initially working as a Project Manager at Metropole since completing his Bachelor of Project Management in 2011, Bryce now acts as a buyers agent for clients, sourcing and evaluating properties with development potential.Visit Metropole.com.au


'How to get started in property development' have 61 comments

  1. May 11, 2012 @ 1:52 pm Asaf Brukarz

    Great summary Gavin, but you’ve glanced over the two most difficult property development processes: (pre)sales and funding. The reason many developments never get off the ground in not due to poor town planning or delays in getting development approvals – most developments never get off the ground because they can’t secure funding or they can’t them sold.

    Reply

  2. May 11, 2012 @ 1:58 pm Michael Yardney

    Thanks for the comment Asaf
    If you check out some of Gavin’s other articles in the property development section of this website, you’ll find he goes into much more detail about each stage, including the challenges.

    You can find our property development articles here: http://propertyupdate.com.au/category/property-development/

    Reply

  3. May 11, 2012 @ 2:19 pm Gavin Taylor

    Great insight, Asaf –
    What you say is true – and it has everything with getting the right product to market at the right time. Town planning is part of preparing the right product. So there are a number of variables that the developer has to get right. No matter what industry one is in, it is always hard to sell something if it is the wrong product, if it is the worng timing or if the market is over-supplied. The fundamentals of busness apply to development as well, which they should.
    As Michael has noted, there is a lot more detail available in other articles.
    Thanks for your feedback.

    Reply

  4. November 14, 2012 @ 3:12 pm Real Estate Professional in Illawarra

    I think you have a great knowledge about the development of property . Will you please share some more reviews ?

    Reply

  5. November 17, 2012 @ 7:31 pm George33

    One can get a vast knowledge from this topic about building and acquiring property. Thanks for the post.

    Reply

  6. December 18, 2012 @ 7:35 am ndumiso

    hi, i found this to be a very interesting field to explore. any tips on someone like myself who’d like to grab the opportunity of property development? It’s always been my dream to build apartments for sale or rental. Your advice will be greatly appreciated.

    Reply

  7. February 28, 2013 @ 11:12 am clive

    I have already built an sold one property and now I am building a second one here in South Africa but my concern is that I do have an idea and a potential to become a registered developer and grow in this industry because I have got so much interest,please guide me as to where and how to get started,your assistance will be of great apreciation.

    Reply

  8. August 5, 2013 @ 4:04 am joseph obakeng nkwe

    how do i go about buying a block of flats, and were can i get funding if i don’t have any

    Reply

    • August 5, 2013 @ 5:34 pm Michael Yardney

      Hi Joseph
      We’ve bought 28 separate blocks of apartments for clients over the last 5 years – it’s a great investment strategy.
      But it requires a substantial amount of money and if you don’t have any, you shoudl probably set more modest goals to start with

      Reply

  9. August 22, 2013 @ 4:56 am Dr Thabane Ocean Malatji

    hi
    i am a young dr who just started with internship this year january. i am being paid well and saving enough but i want to be a property developer in 4 to 5 years time (e.g building town houses) and the reason for my saving is to build myself a capital in the form of money. i can see that with the little i am saving i wont be able to make my dream come true at that given time since i would have saved about R500000. how will i go about finding augmentation once i’ve got the money I mentioned? or is there any other way that i can be funded even before i reach that 4 or 5 years period, please help me

    Reply

    • August 22, 2013 @ 7:11 am Michael Yardney

      Thanks for the comment.
      Many investors want to get involved in property development, but it’s the peak of the triangle, something only really available to a few who have developed years of experience, built a large asset base and have good cash flow.
      It’s unrealistic to expect to achieve this in 5 years

      Reply

  10. October 25, 2013 @ 12:23 am Lauren B

    Thank you for this posting. I am a master student of real estate and have decided to become a developer. I ultimately want to manage the entire development process and my own company, but first I need experience with each detail of the process so thank you for beginning to break it all down. What roles I should take on in order to learn the most and get the widest and deepest amount of experience is my next Q. I was surprised to see you had a product to sell at the end of this article because it was so informational for me. I think information and offering real value is the best way to attract your customers. 😉

    Reply

    • October 25, 2013 @ 6:29 am Michael Yardney

      Lauren
      IF you’re serious about getting involved in property development as a career you’ll find your theoretical education will only get you so far. Find an internship with a property development company and learn on the job – it’s the best way to do it.

      Reply

      • October 27, 2013 @ 10:26 am Henry

        Hi Michael, re your reply to Lauren, can you priovide a list of property development company? Thanks

        Reply

        • October 27, 2013 @ 10:41 am Michael Yardney

          Thanks for reading this post and your comment Henry. You don’t really expect me to list all the potential employers Lauren could approach do you? I don’t know where she lives, her qualifications or aspirations. I’m sure if she’s studying development she’ll know where to start

          Reply

  11. November 1, 2013 @ 9:04 pm Expert Real Estate advisor in Illawarra

    Recently I invested a hefty sum on a property. Thanks for this information. I guess it’s high time for me to start a property development business.

    Reply

  12. November 7, 2013 @ 9:40 pm Unique Property Management services by Bunbury Real Estate

    Gavin has a good experience in the field of real estate. His property strategies are beneficial for property investors.

    Reply

  13. December 26, 2013 @ 8:37 pm Johannes

    Hi I have been an eastate agent for long and have been woeking with property developes and I also want to become a property developer. I have learned how property developers do and working as one them. With this experience, can I be able to become an independent developer

    Reply

    • December 26, 2013 @ 9:37 pm Michael Yardney

      Johannes
      Working with a developer as an estate agent is very different from being a developer and having your own money on the line.
      A property developer needs a myriad of skills over a number of disciplines. My best piece of advice- start small because you’ll learn 80% of your lessons in your first 2 or 3 developments.
      If you make it through those, you’ll be well on your way

      Reply

      • August 18, 2014 @ 2:25 am Elissa

        Hi, I want you to be brutally honest, I live in Toronto, Ontario (Canada). If I want to become a property developer how much money will I need to start out?

        Thankyou

        Reply

        • August 18, 2014 @ 7:28 am Michael Yardney

          Elissa, thanks for your comment. I’m sorry I don’t know the Canada market so why can’t answer the question, what I can say is that it is likely to be considerably more than you expect. Property development requires deep pockets.

          Reply

  14. December 31, 2013 @ 6:21 pm Building Certifiers Brisbane

    Wow! What a great post.

    Reply

  15. January 14, 2014 @ 6:08 am Caleb

    Thanks for the article. This will definitely help in the process of real estate development. Great guidelines to follow.

    Reply

  16. January 17, 2014 @ 4:01 pm Weighbridge Suppliers in Doha

    there are a variety of factors that the designer has to get right. Regardless of what industry one is in, it is always complicated to offer something if it is the incorrect item, if it is the worng time or if the industry is over-supplied. The basic principles of busness implement to growth as well, which they should.

    Reply

  17. January 21, 2014 @ 9:39 pm Private Building Certifiers | Building Certifiers - Certification Brisbane

    There is no doubt that when great minds are put together to formulate a response to an issue they can achieve anything.

    Reply

  18. February 8, 2014 @ 7:41 pm Marei

    Hi Michael,

    I’m 19year old German student and finished school last year. I’ve just figured out that I would love to work in property development later on. Reading our article just confirmed my interest. However I’m very incertain which would be the right bachelor study to get there. Economics, architectectur, urbanistics? Can you help me? Thanks!

    Reply

    • February 8, 2014 @ 8:07 pm Michael Yardney

      Marie
      There is no specific course for property development, however architecture or project management are good starting qualifications to get a job with a property development company and lean on the job

      Reply

  19. March 3, 2014 @ 10:21 pm Kristy

    Hello, I have read all these posts, some great advise in their. I myself am busting to start developing property. I am coming form a complete different field but I’m obsessed with real estate. I am wanting to start small by buying blocks of land building houses and renting them out, and selling some.
    my dream is to buy big land and doing subdervision to Make lots of smaller blocks. I am about to start a cetrificate 4 in real estate to give me some knowledge, before i start but reading previous posts should I also look into project management courses as well.? Any advise please?

    Reply

    • March 4, 2014 @ 6:09 am Michael Yardney

      Kristy
      The advice is start small as you’ll make most of your mistakes and learn many lessons in the first few developments and you’ll need much more money than you think

      Reply

  20. March 8, 2014 @ 8:35 pm Brendan

    Michael, what advice would you give someone like me who is looking to move from the UK to Melbourne to do Property Development – which is what I am doing now. I will be looking to invest around A$ 1.3m. I understand the business in the UK as I started it in 2010 with no funds and have developed and built the business to date. I agree with what your saying about starting small and building up. Any help would be appreciated.

    Reply

    • March 8, 2014 @ 10:15 pm Michael Yardney

      Brendan
      Some of the things you’ve learned in the UK will definitely be translatable to here, but there’s a lot to learn about how the system works here.

      While the funds you have are substantial, in my opinion, you’ll need more than that if you plan to make property development a full time living

      Reply

      • March 9, 2014 @ 3:34 am Brendan

        Thanks Michael for your prompt reply.

        Reply

  21. March 9, 2014 @ 6:16 pm Ben Everingham

    Hi Michael.

    I really enjoyed this article and your approach to development.

    I just finished one of your books which has helped shape my entire investment strategy to buy and hold.

    Please keep producing this great content!

    Reply

  22. March 26, 2014 @ 2:40 pm Cordelia

    Hi Michael,

    I am a property economics student in Sydney and I am currently undertaking some research into the development process. Yours and Gavins articles are both great. I just have a question. It might be a little too specific, however we have been reccomended to ask professionals in the field for their advice. From planning to handover, how long do you think it would take to complete a residential development project with 30 lots each comprising 450m2? I understand there would be some variables such as council approval and market factors contributing to how successful the house sales are, however, what would your rough estimate be?

    Thank-you
    Cordelia

    Reply

    • March 26, 2014 @ 5:54 pm Michael Yardney

      Cordelia
      Thanks for the kind words and your question.
      It’s not really something I can answer in this forum – too many potential variables involed

      Reply

  23. March 27, 2014 @ 5:55 am Caleb

    I think the first step of the process outlined above is very important. Answering the question of “Why” you are getting involved in property development will lay the foundation of how you will proceed with the process.

    Reply

    • March 27, 2014 @ 6:50 am Michael Yardney

      Thanks Caleb- you’re right – the “why” is very important.

      Reply

  24. March 27, 2014 @ 3:32 pm Graham

    Hi Michael,

    Great article!
    I live in Brisbane and always thinking of buying a plot, pull down and rebuild.
    1. Could you list the advantages and disadvantage of developing in the CBD fringe vs suburbs (say 20km from CBD)?
    2. Do you think $800k is enough for a small project on 600-800m2 land?

    Thank you.
    Graham

    Reply

    • March 27, 2014 @ 4:51 pm Michael Yardney

      Graham
      Some areas in Brisbane are ripe for development and others are not – this is not the forum for this type of advice.
      If you’re interested why not contact our Brisbane office on 1300 203030 and speak with Shannon Davis. he knows the Brisbane market backwards

      Reply

  25. April 8, 2014 @ 9:20 pm Kayla

    Hi Michael

    Does your e-book detail the step/sprocess and legalities involved in developing an estate property. We are a family of four siblings who intend developing a fully fledged estate for all of us to live on and not for sale. We envisage the estate to be quite expansive and possibly include a church as a subdivision.

    What is your advice i.r.o. our plans?

    Reply

    • April 8, 2014 @ 9:32 pm Michael Yardney

      No it doesn’t – you’re looking for a lot of very specific information from a free ebook aren’t you?
      However it gives a great introduction to the process of property development

      Reply

  26. July 1, 2014 @ 9:47 am Bourn

    Interesting Read

    Reply

  27. July 7, 2014 @ 1:05 am George

    Hi
    I would like to become a property developer but I do not have funds , what can I do to make my dream come true because I’m so much willing and looking forward into becoming a property developer. Please help me

    Reply

    • July 7, 2014 @ 7:35 am Michael Yardney

      George
      property development is an advanced strategy and you need to work towards it. One way is to educate yourself. A great way is to get the knowledge at my annual Property Development & Renovations workshop http://www.realestateworkshop.com.au/

      Reply

  28. September 30, 2014 @ 8:18 am sal

    Great reading and I’m keen to take the next step. What is the minimum cost to buy, develop and build in Australia? Depending on the amounts involved, I’ll need to check my borrowing capacity.

    Reply

  29. January 5, 2015 @ 9:43 pm Dmtiry

    Hi Michael,

    Could you help be understand a rough figure of how much money I need to have in my pocket relative to the money required to do a development? E.g. If the development + land is around 1 million, do I need to have 20% cash (i.e. $200 000) so that I can get the rest from the bank?

    Thank you!

    Reply

  30. February 19, 2015 @ 2:53 pm jj

    Hello Michael, my siblings and I recently inherited property from my father in another state. My father and his siblings leased the property to oil and gas company and they have been drilling on it for years. We do get royalty checks for gas since my father passed away. The land also has lots of timber and we believe gas. Not sure. Anyway my sister recently formed a LLC and the LLC will manage our holdings. We have no clue as to where to begin to develop this property. Some people want to sell it and others refuse. Some family members want to build…but I told them they need a lot of financial backing and management savvy for that. Is there something that we can do that involves leasing to timber companies perhaps…something simple? Any ideas. Please email me. Thank you!

    Reply

    • February 19, 2015 @ 5:28 pm Michael Yardney

      jj

      Sounds like you’re overseas, not in Australia is your incorporated a LLC. A development requires significant funds and agreement between all parties – it doesn’t sound like an option you should explore.

      Reply

  31. April 29, 2015 @ 10:37 pm First National Real Estate Bennetts

    This is one great site for seasoned and newbie investors alike. Great article!

    Reply

  32. May 22, 2015 @ 9:26 pm Nath

    Hi Michael thankyou for the great read.
    I’m 22 and currently working full time in construction. It is my dream to become a property developer one day so to get my foot in the door, I’m considering a degree in construction management at university. By completion i will have accrued a debt of around $80,000 which will be payable through HECS. I guess my question is, would it be wise to go ahead with study to increase my knowledge of the industry and increase employability but get in a fair bit of debt? Or continue to work full time for increased capital and try to get in contact with the right people to make it happen.

    Reply

  33. January 6, 2016 @ 8:06 am paul dawson

    There are plenty of new developments in sydney at present, but with a shortage of tradies a lot of what ive seen is shoddy to day the least, im a tradie , and the building industry is ive heard is pushing to lower the warraty period for defects??

    Reply

    • January 6, 2016 @ 10:49 am Michael Yardney

      Paul
      This happens every property boom -t here are not enough good tradies to cope with the work

      Reply

  34. March 18, 2016 @ 12:12 pm Justin from the Property Developer Podcast

    This is a good article on getting started in property developing. I think if you are serious about doing developments you should pay for some mentoring as the opportunities to make costly mistakes are many, especially compared to the cost of education. If you are up for the challenge it is a very rewarding experience, not just financially.

    Reply

  35. June 2, 2016 @ 2:33 pm Kellie

    Hello Michael,
    I am inquiring about the process in relation to the property development process when there is multiple lots on one property and the obligations as a property developer in setting up Owners Corporation. Do you have advice regarding the steps that follow or where to get the appropriate information or resources?

    Reply

    • June 2, 2016 @ 7:36 pm Michael Yardney

      Kellie
      This process requires the input of both a surveyor and your solicitor

      Reply

  36. July 26, 2016 @ 9:53 pm profitable property education

    Great article Michael you summarize it very well this will definitely help beginners.

    Reply


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