How YOU can get involved in property development…
Keywords: Property Development, Carly C, CCorp
by Carly C Property Developer and director of CCorp

Property Development seems to be the great unknown to many people. In Australia we have such a love affair with property and rightly so. And there are more and more of us turning to property investment as a solution to create the life, wealth and future that we want. But property development still seems to be a subject that escapes most people and is a bit of a blurry topic. What exactly is property development? How do you get involved? How do you start? Not knowing the answers to these questions leaves most people too scared too actually get involved in developing.

And what a shame, because property development is the one of the most powerful things you could ever learn and action, especially if you like property. And I believe that once you learn, just about anyone can do it.

So how can you get involved? Well the good news is that it may not be as hard as you might have thought. You need to learn the basics first and if you take it step by step you will see that it all starts to make a lot of sense and fits together quite easily.

Before anything else you will need to know the seven stages of property development. These are the main seven steps that any developer needs to know and understand. Each step is crucial and leads easily into the next. The interesting thing is you don’t actually have to do all seven steps to be a property developer. But you do need to understand them all.

So what are the seven stages?

1. Finding the development site:

You need to have the right tools to be able to locate development sites that are not on the open market or are in the underground market. You see most developers, big or small, will pick up development sites that never really came onto the open market. So you need to know how to look for these and how to recognize when it is a good site.

2. Site Analysis:

Once you have found the development site you will need to do a bit of research and see what the potential is, what is planned for the site, if there is no approved planning what are the possibilities and will that plan work in that local area. Will people buy it? Will people rent it? Again, there are very easy ways to quickly do this research and assess this information right from your computer.

3. Financial Feasibility:

Now that you think you have a site and the plans looks good, we need to see if there is any actual profit in the deal. To do this you do a financial feasibility which is just developer talk for, lets add up the profit and see where we stand. You can get specific developer software that will help calculate the profits or losses in a potential development. This is of course what one the most important stages and you need to know it well, once you get the hang of it, it gets quite easy and straightforward.

4. Finance:

If the deal comes up profitable enough in step 3, then it is time to get finance for the deal so that you can move forward and start developing. As a residential investor your finance options are limited to a degree because you are working at the retail end of the market. As a developer you have so many more possibilities and options because you are working at the wholesale end of the market. This is where the magic really happens and you can start to do amazing things.

5: Planning Approval:

When you know that you will be able to get finance, you need to ensure that the development has planning approval to be built into something of more value than it currently is. That is the heart of development; maximizing the value by re-planning and reusing the existing property. A good architect can help you take care of this whole stage for you so it is done correctly and professionally.

6. Construction:

Most people think that construction IS property development. Where its really just one step of the 7. Construction is what a builder does, not a developer. Planning and deal making is what a developer does. Once you have the deal planned out, financed and ready to go you hire a builder who carries out the whole construction phase for you.

7. Selling:

The final stage is selling, though selling really should be taken into account and started at the beginning of the project. You can learn the tricks of the trade to ensure that you sell your properties fast and for the price that you want, if you don’t want to be involved in the ales process there are many organizations that will take this over for you. And Im not talking traditional real estate agents, remember developers use all sorts of options that most people are not aware of. And these options are open to you if you start learning more about development.

The beautiful thing about development is that once you learn these seven steps you can pick and choose which ones you want to do and how much involvement you want. You see, you could literally just do step one and become a millionaire. That’s right, by just understanding property development, by learning these seven steps you will open yourself to a whole new world of property and investment where the real money is made and fun is had.

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August & September 2008