The Skills You Need To Be A Success
Anthony Corin says an entrepreneurial mindset, plus the knowledge of several aspects of property development, are key to a winning formula.
2 September 2023
Property development is a sizable commitment of money, time and patience. A venture that results in considerable returns when each phase of the project is completed properly.
A developer’s fundamental objective is to seek out and secure favourable land opportunities, develop the land and maximise its potential and, lastly, complete the project and turn a profit, either by selling the units or becoming the landlord and renting them.
In order to be successful in this field an entrepreneurial mindset, plus knowledge of the following aspects of property development, are key.
Learn The Rules
An imperative requirement to start a property development journey is to have sufficient knowledge of land rules and usage to keep your expectations realistic for what can be achieved onsite.
Knowing what to look for to help you select a suitable section will make for a smoother start to the project, mitigating the risk of unnecessary expenses. It is valuable to research your local district plan and mapping services to identify land zoning and rules, which directly impact what you are able to build.
When viewing online mapping services, take note of any site-specific controls and overlays, the location of underground services in relation to the site, as well as floodplains and overland flow-paths, all of which can have a significant impact on the design of the development as well as the costs.
Keep in mind council planning regulations go through changes so it would be wise to keep informed of the newest information available and how it could impact your development.
Trust Your Team
Working with a trustworthy team is a priority when developing. This includes selecting reliable consultants to engage such as surveyors, planners, engineers and architects. It also includes hiring reputable and skilled contractors, as well as potentially engaging a credible project management team to manage all communications and project documentation.
Working with a team whose goals are aligned with yours and who you can collaborate with and trust to get your project over the line is ideal. It is vital to be aware of how your money is being spent, if fees are fixed or adjusted, and how these costs add up throughout the course of the project.
A competent project management team will carry your project through resource and building consent, effectively communicating with council and addressing RFI quickly to shave potentially months off the timeline of the project, saving you money.
Understand The Costs
Financing is the crux of your property development goals. To come into property development you do require a sizable amount of equity to invest, which depends on size and complexity.
But you will need to prepare a comprehensive and accurate budgeting sheet to keep you on track with costs and timings, mitigating risk for yourself that you do not go over budget, which could in the worst-case close the project. When securing funding to inject into construction, the bank will thoroughly assess your situation.
Project timeline, total equity, the current market, and presales (specifically off-plan sales) are key factors considered in how much the lender is willing to fund. The bank will also be assessing your intention with the end of the development, whether you plan to build to sell the units, or build to rent, in which case an investment portfolio will be considered.
It takes a resilient person to succeed in property development. Obstacles inevitably arise throughout the course of the project. The property market experiences fluctuations and unexpected costs can crop up. However, a developer with a level-headed attitude and patience throughout the turbulence, supported by a trustworthy team working together to push the project over the line, can result in substantial returns.
Anthony Corin and his team specialise in property development and construction using ICFs and operating through a relational contract, open-book system. Shorcom Ltd, 0800 SHORCOM, www.shorcom.co.nz