One of the most discussed subject in the real estate environment. Many people dream about building a development to make large profits. Most of the investors, especially if not or wrongly educated, think that all you need is to find land and build one or more houses, townhouses or an apartment complex and then sell it, but is it really as easy as it sounds? Well you are about to find out the 5 main rules that a developer must follow before building.
1) Choose with the head not with the heart:
So here is where everything starts! Your dream of making a lot of money starts by monitoring the market and finding a piece of land or a property to develop. You jump on the internet and search for a nice big block in your favourite suburb thinking that if you like it, everyone does. Well, that’s not really the way to classify an area for a suitable property development. You might do some research on the internet about how well the suburbs in your area perform, but unfortunately, that’s not enough. Your main goal is selling the property/properties you develop at a good price. So you must choose a spot where your project will perfectly blend with the surrounding area, in terms of how it will look and how well it will sell. For example, don’t choose to build in an area where there are already plenty of brand new projects similar to yours, as it will face high competition during the sale which will result in a drop in price and less profit, if not a total loss. To avoid bad choices and headaches, use a development/investment consultant for the project. He/She will guide you through the whole process, and make it nice and easy. Plus He/She will help you find the perfect spot for your project. You might end up spending a few thousands more to start but this move will help you save hundreds of thousands at the end!
2) Be different but not too much!
Australia has seen a big number of new projects over the past few years and you’ve probably noticed that some developments all look the same. Following this style is definitely the right thing to do, but you might prefer to change a few things in today’s market as it’s a bit different from the others. If done well, you will make your sale process easier and see increased profits! Offering more extras than others, even a little and well-designed study nook can make a big difference when it comes to comparing what’s available for the buyers.
3) Quality first, savings after
You are looking to build to make a profit, which means that you want to save as much as you can, that’s absolutely fine, but with what’s on the market today if you have the right network of consultants you can build a better quality home using top-end materials and stay within your budget. Quality is important and buyers recognise it, not to mention quality products will make your advertisement look a million dollars compared to your competitors.
4) Choose the right agent!
Your goal is not to make a profit, it’s to make a really good profit! When it comes to the agent that will sell your property, you might want to choose one that will ask for less commission. The reality is that you choose an agent because of their ability to sell. Classifieds on the internet are not real most of the time, so don’t bother looking at it. First, he/she must be local in the area you are building. The agent must have done well in their long career, but demonstrate a high level of performance even with “newbies”. A good Real Estate agent will have the right network and support by the agency no matter how long they have been in the business. The commission must be aligned with one of the others or lower. You still need to earn as much as you can. Some agents charge lower fees, this doesn’t mean that they are worse than other agents. To know if an agent is right for you, see how well they perform by going to one of their open homes, if they can sell you a house when you don’t need it, they are good for your project. Create trust with them, no one will ever try to trick you if you know them already.
5) Marketing and sale off-the-plan
Now that you have the agent, choose the right marketing team. It’s worth spending some extra money on your marketing. Start selling off the plan, if you don’t sell any prior to construction, then you might want to make some changes.
So being a developer is definitely a good way to make a large profit, but it can only happen if you are surrounded by the right people, and make the right choices by keeping your main goal in mind
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