How long does a property development take?
How much does a property development cost?
These are 2 of the most common questions that we get asked.
Although many development builders will spin tales of super success in 6 months – the truth is a little more sobering. Clients who trust us and listen to our expert opinion do see a fantastic return on investment, but it’s important to have a clear picture of what that looks like going into the game.
For those new to the market, the actual time and budget requirements of property development often come as a surprise.
Definitely do your online research before diving in, and then make sure you speak to a reliable property development builder who has experienced building what you want to build, and where you want to build it.
Jubilee are professional property development builders in Perth. Joe has been in the industry for 17 years and works primarily in upcoming low supply high demand suburbs, building one-story triplex property developments. In our experience, this has been the best low cost, low risk & high return investment option in the current market. Of course, you need to get customised advice that’s relevant for you before making any investment decision, as this article (and all online articles) can only ever offer insight into the prior experience of others.
Property development usually means that an old property is going to be demolished, and multiple homes (or event apartments) are going to be built on the same block of land. Multiple homes mean multiple titles. This means that the land has to be subdivided if the intention is to sell on completion.
The purchase process, settlement, demolition, design, construction, subdivision, and sale process takes time. It’s important to understand and be aware of this prior to investing in a Perth property development. Once you’re aware of this, prepared for it, and you have an experienced builder guiding you – you’re set to make a significant return on your investment. One rarely rivaled in other investment options.
So what are the actual numbers and timeframes look like with a property development?
Note: the following is an indication of the potential property development costs and timeframes associated with a single-story triplex property development in Perth, in 2020. This information is intended as a guide only. Each individual project will incur differing costs and may fall out of the ranges provided.
|Locating and purchasing a suitable block of land||1-6 months||$400,000+|
|Development design||4-6 weeks for up to 4 homes||$5,000 to $15,000|
|Council Development Application||2-6 months||$4,000-$8,000|
|Design and engineering drawings||4-8 weeks||$7,500-$15,000|
|Property Development Builder quote and contract||2 weeks||0|
|Building Permit||2-3 weeks||$4,000-8,000|
|Financial approval and loan set up||4-8 weeks||0|
|Perth property development construction||20-40 weeks pending on the size of the project||$1,000 – $1,600 per m2 (turnkey)|
|Subdivision and new titles (built strata)||6-12 weeks||$10,000|
|TOTAL||12 – 18 MONTHS||1 – 3 MILLION|
As you’ll understand, providing ranges for property development timeframes and budgets is difficult given that individual circumstances are unknown. There are multiple number of circumstances that effects development costs, some of these include:
- topography of the site – is it flat or has slope/retaining on it
- shape of the block – is it rectangle or obscure shape
- soil type – sand or clay or other
- water table level – proximity to underground water
- Proximity to the coast – close to the coast
- Inside a bush fire zone – BAL rating
- Size of the homes – 2x2x2’s or 4x2x2’s with 2nd living space
- Specification of the homes – standard ceilings and chrome tapware or high ceilings and gunmetal tapware
- The size of the home to be demolished – single or double-story, number of tree’s
- Council fee’s/charges specific to your site – public open space/developer contributions
- Finance – LVR’s and interest rates available, bank or private lending
- Real estate agents fee’s for commissions and advertising – including buyers agents
- Sub-division type – build strata, survey strata, or green title
The estimates we provide to potential clients involve a Feasibility Assessment, which breaks down the actual time and cost investment that your project is likely to require. A Feasibility Assessment also projects expected sales rates and will provide a much more accurate indication of your potential return on investment that the summary above can.