Many market analysts have spoken at length about the potential advantages associated with property development as opposed to property purchase. Some have argued that building after buying can cultivate increased long-term equity, while others have noted that manufacturing a property from scratch can implicate greater time, stress, cost and risk to the developer.
If you are an investor looking to build after buying, it is important that you identify a development site that can be positioned to deliver profitable investment outcomes. How can you do this? Here are five quick tips:
1. Take the some to research growth estimates and demographic breakdowns within potential investment areas; this may help you to determine areas and property types that will likely be in future demand;
2. Look to identify the presence of a diverse economy in any prospective investment area; this can sometimes be a good indicator of the long-term economic growth potential of a region;
3. Try to equip yourself with a stellar understanding of the bureaucratic frameworks in which residential developments operate. This may entail researching zoning and development regulations, timelines for applications, minimum lot sizes, and speaking with the local town planner to gain a broader insight into the local development context;
4. Consider the development site's accessibility to important amenities such as shopping centres, public transport, health and education facilities, major highways and parks;
5. Try to have a vision for the property prior to beginning your search; this will provide you with some sort of guiding criteria for looking at potential development sites;
6. Research and list the risks involved before proceeding. While property developments can potentially deliver rewards, they can also carry larger risks.