Property Development: Top Three Tips for Making Money

Whether talking about it, dreaming about it or actually doing it, developing property – residential, commercial, even industrial – is almost a national sport in our property-obsessed culture. And with good reason – those who do it well make good money.

Monopoly Houses ImageThere are plenty of stories about people who have tried and succeeded. There are also as many horror stories about people who haven’t and have lost all their money.

The secret to being a part of the first group is understanding the risks involved and knowing the mistakes to avoid.

Craig Newnham, Green Finance Group’s very own Property Development Finance Specialist, is one of the country’s most experienced Property Development experts with 30 years of construction, development and finance experience to his credit. Craig offers the following Top Three Tips for Making Money when it comes to development projects:

ONE: Do your homework. 

Research is critical if you want to avoid paying too much for the property. This research includes (but is not limited to):

a)    Identifying your target market.
b)    Understanding the challenges you could face in obtaining an acceptable Development Approval (DA).
c)    Knowing your real costs. Be sure to have accurate building cost estimates that factor in ‘all’ the other          costs incurred in relation to development.

TWO: Establish a Risk Management Plan.

Risk is a given with this type of project BUT being in a position to accurately identify, quantify and better manage your risks will make all the difference to your bottom line. You need to know, from the outset, what things can and do go wrong that cause delays, cost increases and untold amounts of stress.

THREE: Get an Expert on Your Side.

When it comes to finance, make sure you are working with a professional Finance Broker who understands the development process and financial institution requirements. Just because you’ve been dealing with the same Bank Manager for the past 20 years doesn’t mean they are qualified when it comes to the world of development finance. Look for someone with a proven track record who can really add value when it comes to navigating your way through the challenges that developments are renowned for.

If you already own or are thinking about buying a property with development potential, we can help you:

  • Review the development opportunity and identify the market, planning, construction and finance risks.
  • Provide strategies to mitigate development risks.
  • Structure your project to maximise your borrowing capacity and financial return.

To ensure your first development is not your last, discover the options available to you, contact Craig Newnham at Green Finance Group and make an appointment today on 0458 460 565.