Becoming a Property Development ‘Area Expert’
Published 8:24 am 9 Jul 2019
If you are thinking about carrying out your first property development, your first step is to become intimately acquainted with the area where you plan to develop. DG Institute CEO and Founder Dominique Grubisa explains that when it comes to property development you need to crawl before you learn to walk.
Before you invest your hard-earned money in a property investment, you need to find out everything you can about the local area.
Property development market research is your best friend on the road to becoming a successful developer. To succeed you need to establish the feasibility of your project, examine the financials time and time again, and look at different sources of finance.
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This also includes becoming an ‘area expert’ in the suburb where you want to develop. You’ll want to study everything from its boundaries to its demographics and everything in between. Becoming an expert needn’t cost you much more than your time, a few coffees with people who may be able to offer some insights into your chosen area, and perhaps a few dollars on subscriptions.
Here are 4 key tips for becoming a property area expert:
1. Use the web
The internet is a great place to start. Free property sites like domain.com.au and realestate.com.au can provide you with plenty of intelligence around recent sales, prices and sale waiting times in the areas you’re interested in. If you’re willing to spend a little cash, you can also sign up for services that provide even more detailed property analytics such as Corelogic or DRS Data.
Other, more general web searches will provide you with information about your chosen suburb including its culture, the people who live there, and the types of commerce that are prevalent. Don’t necessarily limit yourself to looking into one area, but rather use the internet and all the information it generates to research two or three areas.
2. Pound the pavement
Seeing is believing, so get out and walk around the area you’re interested in. Take note of things like the general upkeep of the neighbourhood, where schools are located, and the quality of shopping and recreation facilities. Construction activity can tell you if it’s an area that’s on the move, as can the type and price of other properties that are on the market. If the prices are low and properties aren’t moving, there’s usually a reason.
Depending on what type of investment you’re looking at, discovering what developments are in the pipeline can influence your decision. If neighbouring suburbs are booming it could indicate a trend. Or if the area is dominated by owner/occupiers rather than renters, you might consider renovating and flipping rather than buying and rebuilding.
3. Talk to locals
Chatting to locals about the area is one of the best ways to find out about a suburb. Local residents can tell you what it’s like to live in the area, what’s missing and what’s needed. Business owners will give you a good rundown on the local economy and the Chamber of Commerce is a great source of information on upcoming investments that may impact on your development.
It’s extremely difficult to get this kind of first-hand information if you choose to develop in an area to which you don’t have easy access. A suburb in Perth may be appear to be booming on paper, but if you live in Sydney you’ll find it very difficult to get a real feel for the area without doing on-the-ground research.
4. Analyze what you’ve learned
Finally, bring together the different types of intelligence you’ve gathered and make some judgements. Your research should have informed you about trends in the area, the appetite of the market for different development types, and factors likely to impact positively and negatively on a potential development. Use this information wisely, and you’ll put yourself in the best position possible to embark on your development.
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