Use this fast property development checklist as your guide for your next property development project. This checklist does not replace professional property development due diligence.
1) Assessing the Site
As a rule of thumb the first three things that you should look at are:
Zoning – is the site correctly zoned to accommodate your proposed development. This also covers an examination of restrictive overlays on the site. A working understanding of planning zones and overlays is required in order to determine the highest best possible use of the proposed development site.
Size – Is the size enough to accommodate four townhouses or three or 10.
Frontage – Is the frontage wide enough for your development.
Is the site flat? – A sloping site means adding retaining walls, which further translates into more construction costs. A site contour survey will help you determine that with ease.
Is the site affected by Floodingor does it fall under a Bush Fire zone? Will, that has an effect on the yield?
Highest Best Possible Use – is your Local Authority supportive of what you can fit on the site?
2) Market Analysis
What’s already being built in the neighborhood?
Who are the builders already building it? Find out the costs they are building it at to get an idea of construction costs, as this would help you in your financial feasibility.
What is the design intent in the local area? This is determining what kind of townhouses or units are being designed in your area.
What is the demand for such designs in your area?
What would be the end value of townhouse?
What is the rent in the current market for a new townhouse & for an old property?
What are some comparable sales in the nearby area?
3) Land Acquisition
How is the site to be acquired?
What are the terms of settlement?
Can I negotiate the price? If not, can I negotiate the terms?
Is it possible to do a joint venture with landowner?
4) Legal Structures
What would be the best structure that will hold the development site?
What will be the GST and Capital Gains implication of the development?
5) Property Development Financial Feasibility
Do your numbers stack up?
What are various financial models? Develop and Sell Vs Develop & Hold