The first step is to determine your budget. Once you know how much you can afford to spend, the next step is to choose the type of development you want to do, be it houses, units, townhouses or apartments. It’s important to search in an area you have experience with and that you intimately understand.
Brisbane is divided into zones. These zones dictate the type of development that can occur on a particular site - you can only do certain developments in certain areas. So the first step is to look at the Brisbane City plan and do a property search on the site you’re looking at, which will detail the exact zoning. If you’re new to developments, the best thing to do is to contact us or even a town planner who can explain what you can and can’t do in particular zones.
Once you have chosen your site, the next step is to research and analyse the local market. The key thing you need to ask yourself is: “what type of developments/properties are oversupplied and which are undersupplied?” For example, does it have lots of houses but only a few units and townhouses or vice versa? Then ask yourself what your strategy is - will you develop a high value or cost effective product and will you develop a product that may be over-supplied or under-supplied?
The time it takes from start to finish varies quite widely depending on the type of project. Starting at finding a site and getting a development approval can take 6-12 months. From there, building, selling and completing the project can take anywhere between 6 months to 2 years. A smaller project consisting of 8 townhouses, for example, would take closer to 12 months; whereas a 50 unit development will likely take 2-3 years from start to complete finish.
Once you have a development approval, building contract and a valuation (and achieve presales in most instances), it’s time to organise your finance. It’s best to speak to a development finance specialist like Keiran to get you the best deal possible on your finance. As a general rule, assume that you need to put in 20-25% of TDC (total development cost) as cash.
Again, this is dependant on the size of the project. The bigger the project, the more you have to sell. The less experienced you are, the more likely you are to make pre-sales at the start. It’s mostly based on risk in the lender’s eyes so the riskier the project, the more pre-sales you will have to achieve for the lender to loan you money to complete your development.
There are a couple of things you can do to find good consultants. The first is to contact a development manager who has experience as well as existing contacts. The other option is to call around and obtain a number of quotes. You should ask for their track record of completed projects and make sure they align with the type of project you are doing. Make sure they’ve been around for a while and are reputable. Don’t be afraid to ask their previous clients for references.
There are general rules around how much you can pay per dwelling and that will vary depending on the end value of the development. The best thing to do is to conduct a comparative market analysis to look at comparable sales in the area in order to determine the fair market value of the site.
If you are a first-time developer or are looking for someone to manage your development while you continue working full-time, a development manager is exactly what you need to help you get your project going. Contact Keiran or David to have a chat about managing your development.
It depends to the quality of your consultants and whether you are compliant with zoning. If you have a good team and your development is straightforward and code assessable, then your development should be approved without much trouble. Queensland has one of the best and most efficient approval processes so it shouldn’t be too difficult to get an approval provided you are within council guidelines. However, if you’re going for an impact assessable application then it’s likely that you will have a bit more trouble getting your approval in a timely fashion.