The five most common mistakes in property development in Australia

Dominique Grubisa
Dominique Grubisa

Published 8:25 am 27 Jul 2018

Facebook Twitter Whatsapp Linkedin

Enrolment in residential property development courses is on the rise as people increasingly see development as a wealth creation option. DG Institute Founder and CEO, Dominique Grubisa outlines the five common mistakes to avoid in order to increase your chances of success in property development in Australia.

Residential property development is a great tool on your wealth creation journey. In basic terms, the process involves acquiring a site or sites, adding value by constructing additional new dwellings, and selling the dwellings for a profit.

There are many, many success stories of people who have made good money through timely, market-oriented developments that were snapped up by buyers. But sadly, there are an equal number of stories of people who failed. Whose developments simply didn’t sell or did sell but for a price that didn’t convert to a profit.

What’s the difference between the successful and the unsuccessful property developments? The unsuccessful ones ignore these five basic rules. Learn from their mistakes to give your development the best possible chance of success.

→ Exclusive Webinar Briefing Where You’ll Learn How To Accelerate Wealth & Cash Flow Through Lower Risk Small Property Developments

These are the most common mistakes made by property development beginners in Australia:

1) They pedal against the property cycle

The property development industry is affected by many things, from the economy, to government policies, even the mood of the nation. Before you set out on this journey you need to understand the fundamentals of property economics including interest rates, unemployment rates, the house price index and the Australian dollar. This will give you the skills to spot the signs the real estate market is about to bottom out, or begin to soar. You don’t have to be a professional economist, but by listening for the signals you can pre-empt a change in the market.

2) They are too ambitious at the start

It’s OK to dream big, but when you’re starting out, don’t overextend yourself or your finances. Make a concerted decision about the aspect of property development you want to begin with, and focus on that area of the market. A basic principle of property development in Australia is to enhance the use of a piece of land to generate money and that can be anything from building new or additional buildings for rent or sale, or simply subdividing a site into smaller blocks.

3) They don’t do enough research

It’s not enough just to research the overall market. You also have to narrow down that research to find out as much as you can about the market you’re considering buying and selling into. Specifically look at the opportunities that are available and the ways you can increase your return on investment. A majority of this research will involve looking into the potential profits you can earn with a specific project and it’s a good idea to not just rely on financial reports and real estate consultants, but talk with other property developers who may have also invested in the area.

4) They don’t think enough about development location

It may be a cliché but it’s a crucial and fundamental aspect of any property development. Pick the wrong location and you’ll find yourself with a development that’s costing more than you planned because it won’t sell or rent. It’s best to select an area in which to buy that is heading into an upward growth cycle or in the early stages of one. The area you select will also determine what you do with the development – either sell for a profit or add it to your assets to sell at a later date.

5) They don’t think enough about the property development financial feasibility

When you’ve found a site and decided exactly what you’re going to do in terms of development, you have to then figure out if the project is going to be financially beneficial and achievable. One way to do this is to undertake a property development financial feasibility analysis, considering all the costs of the development, including the purchase price of the site, as well as the gross realisation value (GRV) – or the selling price – of the end product to determine what your profit will be. There’s no point in undertaking a development and spending precious resources, including your time and money, if the profit is not going to be worthwhile.

So, learn the mistakes of others and develop smart. Good luck on your development journey.

Property Development Webinar Briefing


Good Debt Vs Bad Debt With Dominique Grubisa - DG Institute

DOMINIQUE GRUBISA
Lawyer, Asset Protection Specialist and Property Educator

Dominique Grubisa is a practicing lawyer with over 25 years experience. She is a property investor and developer, an entrepreneur with businesses in Australia and Southeast Asia, a speaker, educator, writer and published author.


This column has been written for general information purposes only. It is not intended as legal, financial or investment advice and should not be construed or relied on as such.

About DG Institute

Founded in 2009, DG Institute strives to empower everyday Australians to grow and protect their wealth. Our goal is to provide direction, motivation and inspiration to our clients and help them perform at their very best. We do that through our professional services, in addition to teaching them how to grow their wealth through property and business education.


This column has been written for general information purposes only. It is not intended as legal, financial or investment advice and should not be construed or relied on as such.

Our Happy Clients

  • Lisa Mitchell

    "My name’s Lisa Mitchell. I live in Chatswood in Sydney. Since joining the Elite Mentoring Program. I’ve done two deals made around $240,000. And probably when I add the extra rental that’s coming, it’s another $70,000. I could not be happier with that result. And I’m amazed by it, to be honest, I’m absolutely amazed. […]"

    Lisa Mitchell, Property Uplift Elite Mentoring Graduate

  • Jennine Kimbal

    "Janine Kimball from Newcastle since joining DG Institute we have two projects currently in progress with a gross realization value of about 10 and a half million dollars expected profit from those is going to be probably around $1.8 million when they complete the reason we joined DG Institute and the Elite Mentoring Program, was […]"

    Jennine Kimbal, Property Uplift Elite Mentoring Graduate

  • Michael Kuligowski

    "Hi, my name’s Michael, and I’m from New South Wales. Since joining the Elite Mentoring, we’ve been able to secure three properties. Well, under market value, both in inner Sydney, New South Wales, also regional new South Wales and one in Victoria by, undertaking, this program, we’ve definitely benefited, and we can see that we’re […]"

    Michael Kuligowski, Elite Mentoring Graduate (Property Uplift & Real Estate Rescue)

  • Sharon Harvey

    "Hi, I’m Sharon Harvey. I’m from South Australia. I joined the Elite Program because I was looking for something more in property and I was looking for more education and somebody who would inspire me and Dominique was that person. I listened to her talk and realize that there was a great synergy between us. […]"

    Sharon Harvey, Property Uplift Elite Mentoring Graduate

You May Also like to Read

Property Development Finance 101: Everything You Need to Know

Are you trying to learn how to finance your next property development? Don’t worry, in this article we’ll cover all of...

Australia’s Hidden Economic Crisis

On the surface, Australia’s economy seems to be on the rebound from COVID-19. However, when you dig a little deeper,...

How Much Does it Cost to Build a House in Australia?

The Australian dream has always been to own property, but why not build your own?  Building a new home in Australia has...

Australian Wages See Biggest Drop in 20 Years

Australians are now getting less bang for their buck than ever as ABS data finds wage growth is at record lows.  On...

How To Make Huge Profits Through Property Development

Have you ever considered doing a small property development? Here are a few reasons you should quit considering it, and just...

NSW Bans Construction Amid Rising COVID-19 Cases

A ban was placed on all non-urgent construction within New South Wales amid rising COVID-19 cases. Cases of the Delta...