Pre Purchase
Pre-purchase is a fairly obvious first step in the development process.
As the name suggests, it involves seeking out a block of land or established house site that has sufficient potential to either refurbish the existing property, or obtain development approval to construct multiple dwellings.
At this stage it is important to already have your finance in place or at least have an understanding of your borrowing capacity so that you know your limits and what you should be looking out for.
After all, there’s no point deciding to demolish an old house and knock up five townhouses in its wake if you could not possibly obtain the necessary funding to do so.
You should also have a team of consultants organised who can advise you as to the project’s viability.
This should either be a development manager who can coordinate the entire process and team of industry professionals or individually; a solicitor, architect, surveyor, town planner and estate agent to give their honest assessment of end values and marketability of the completed product.
Concept Stage
Once you’ve found a potential site, the next logical step is to come up with a concept.
- What can you put on the site?
- How many units?
- How big?
- What restrictions are there?
To ascertain what can be constructed on your chosen allotment, you must first assess the local council’s development and planning policies.
Often these documents are freely accessible by logging onto the local council’s web site, or alternatively you can visit their offices and ask to see a hard copy.
At this time you should carefully gauge the market demand in your chosen area; in other words, what type of dwelling would sell or lease well because, let’s face it, you want to design and build a project that has optimal marketability.
You must also undertake a detailed analysis of the neighbourhood character, as maintaining the traditional nature of an area is an important consideration for local council and their town planning requirements and regulations.
Purchase
Obviously, this stage involves buying the land at a price that will allow you to make the necessary commercial profit that deems the project viable.
I will take you through this phase in greater depth in a later article in this series and explain how to negotiate the best possible deal.
Town Planning
Your architect will be required to draw up plans that fit in with the relevant state planning codes according to your area as well as the local council’s development guidelines.
These days, as a result of the increasing complexity of the development process and associated rules and regulations, a surveyor and town planner are involved at this stage too.
Be prepared for a wait, as it may take up to 12 months before you actually get your hands on that all important Development Approval (permit.)
Working Drawing and Documentation
Once you have finally received the Development Approval for your project to proceed, it’s time for your architect and engineer to document the working drawings to allow you to then obtain a building permit or Construction Certificate.
Be prepared for more waiting as this stage can take about three to four months.
Pre Construction
During the pre-construction stage you will be busy acquiring quotes from prospective builders and of course bank approval for the development loan.
Construction
Finally you get on site to build your project, paying the builder progressively at the completion of each stage using draw downs from your bank loan.
Although this stage can last anywhere between six and twelve months, depending on the size of the project, it’s the most exciting aspect of the development as you see all of your hard work coming to fruition.
Completion
Upon completion your project is either leased or sold.
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