Shifting your mindset from Home Buyer to Property Developer

Shifting your mindset from Home Buyer to Property Developer

Looking to become a property developer? It is important to shift your mindset from the thought process of a home buyer to ‘strictly business only’. You need to think more from your buyer’s perspective and less from a personal point of view. Your main focus should be on making a return on your investment. Here are some of the things you will need to consider:

 

1. LOCATION

Location is key. A good property developer will do extensive research into the area they would like to develop in. Focus on the suburbs where developments are popular and avoid looking in areas simply because you could see yourself living there. Look for land in suburbs that have good growth and large blocks to split. Keep in mind public transport and local amenities and pay close attention to R-Codes. No point in buying land that has limited subdivision possibilities. Found a property or suburb and not sure about the areas R-Codes or how many dwellings you can build? Contact us for a free block assessment.

 

2. NUMBERS

Investing is a numbers game. Remove all emotion and focus on return. Perform a feasibility study (we can also help you with this!) and calculate the estimated yield. If you plan to rent out the properties what is the current local rent and where is the market heading? If you plan to sell, what are other local developments going for?

 

3. RISK

It is important to weigh in risk when investing so you aren’t left with unmanageable debt. It is likely you already own other properties and it is important to consider how you will juggle them all when it comes to finances. We advise speaking to a professional and working out your borrowing capacity and financial management to help lower your financial risks.

 

4. KEEP UP-TO-DATE WITH THE MARKET

As mentioned above, keeping an eye on the market is important when investing. This will help you predict future rent and sales. It will give you an idea of the direction of the property market and the demand for developments. It is important to remember that market predictions are only guesses on where the property is heading and this is where you must factor in risk.

 

5. THINK LIKE YOUR BUYER

Steer clear of trends and particular details. Think of the design features that will appeal to most buyers and remember, this isn’t your home you’re building.

 

6. PROPERTY AMENITIES

What will your tenants or buyers want? Consider amenities that will increase the competitiveness of your development such as heating and cooling, space for a dishwasher, outdoor living or an area to work from home (office/study nook/spare bedroom).

 

7. LOOK TO THE PROFESSIONALS

Seek professional advice when making decisions. Choose a company that knows what they are doing and can guide you through the development process. This will give you ease of mind, lower your risks and help you keep momentum on your project.

 

Check out some of our past development projects here.