How to get started in property development
Property development is a great chance for savvy investors to build on their wealth.
Australians are passionate about property and property development. But knowing where to start when it comes to developing townhouses, duplexes and other higher density housing can be tough.
There’s no doubt it’s a hot market for those willing to take the leap. Median home prices for metropolitan Melbourne is $1.07 million in the September 2021 quarter, according to the Real Estate Institute of Victoria.
That’s 6 per cent higher than the previous quarter. Rental yields have also risen by 2.5 per cent in the same quarter, taking median rents to $480 a week, which is a healthy profit for developers.
The solid growth is providing the impetus for everyday Australians to explore property development as another income stream after a period where job security wavered during the pandemic.
However, it’s easy to be swept up in the excitement of a new project, and even easier to assume you have the financial capacity to incorporate any unexpected costs. Being aware of the variables that can impact cost estimates when constructing a small development will help you to avoid the unexpected along the way.
The fact is that developing land offers the lure of potentially large returns, but it can be a complex and time-consuming undertaking, with plenty of risks to be navigated if you’re going to make a good return. These risks can occur regardless of whether it’s your first or second project.