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Property Development is a Community Service
Recently I bought a second hand mower from a retired widower and upon entering his garage I could not help but notice 15 – 20 bicycles of varied styles and states of repair neatly lined up.
The sprightly pensioner explained that, to fill his days he collects discarded bicycles and restores them to offer back to the public for the price of parts as a service to the community.
This event helped me appreciate that developing property is also a community service, regardless of the detractors and ‘NIMBY’ objectors by way of offering the public a recycled and improved product.
When it is done well, in the correct location and for all the right reasons such as gentrification, well designed developments can add character, a sense of place and often immense value to a community.
Property development draws a negative reaction from some minority parties but inevitably a good development must correlate to market demand otherwise the end product will not sell and sometimes the old ways do not complement our ever-changing world.
As towns and cities grow and evolve, changes are required to help adapt and make better use of particular areas to better suit the residents on a broader scale, in line with a bigger picture and future demand. Infill housing and small lot developments allow higher density living in town centres and growth areas identified in draft town planning schemes. These plans are put in place after extensive community consultation and if innovative minds capitalise on opportunities created by changes in town planning requirements or zoning laws they should be applauded. New member for Fairfax Clive Palmer used property development on the Gold Coast to create 40 million before he moved into mining ventures and now that he is expounding an interest in the Sunshine Coasts burgeoning economy we can assume Clive now appreciates a sustainable approach.
Modern sustainable construction has changed significantly from the extreme environmentalist use of recycled tyres, thatching and composting toilets to enable the building of designer homes and units worthy of our finest suburbs.
Due to passive design techniques and innovative new building materials, modern eco-homes blend street appeal with the impressive ability to be classed as net-zero energy super homes or what I call “bullet proof investments”.
Many business owners choose property investment and development as a wealth creation vehicle for retirement, allowing them to reduce time at work and enjoy life sooner.
The more successful take it up full time as they enjoy the hunt for a bargain along with the risk and reward benefits of being masters of their own destiny.
Opportunity abounds for those who are prepared and a major part of the prep will be to gather a team of trusted professional partners with the skills and experience to complement your own because with proper research the rewards are satisfying in more ways than one.
Never be so busy making a living that you forget to make a life, then together, we can make this world a better place.
Dual Occupancy Offers Solutions, When the only Constant in Life is Change
Some optional extras that seemed like a good idea at the time are never fully utilised, like a fold up cup holder on a ride-on mower but a trend toward dual-key apartments that cater for any unforeseen shift in living conditions arising from the inevitable reality that change is the one constant in life, now that’s gold. The versatility and adaptability of your living space and income potential give you more control and immediate solutions when dealing with the uncertainty of life and its changes.
Dual occupancy can describe many different dwelling types from student accommodation with shared living area and key locked bedrooms to larger homes sectioned off to allow subleasing of separate portions including private access, then the more recognised suburban duplex including various legal and under the radar versions rented to family members and understanding tenants. Dual occupancy and dual key options are increasingly being offered to investors in apartment buildings and holiday accommodation homes as they offer increased investment and lifestyle advantages.
Developers are pursuing this niche with a growing percentage of new apartment buildings like Sydneys cutting edge Central Park offering 33% of units as dual key apartments. Investment in student accommodation is also on the rise with projected returns of 7.5% being advertised by marketers.
Prudent developers understand the importance of market research in regards to product and location. Careful consideration should be given to market demand as this is not a case of “build it and they will come”. Design of the actual dwelling requires careful consideration to address access, privacy and most importantly safety and liveability to ensure residents needs are not only well catered for but enhanced to create maximum market demand from both tenants and investors. A creative development design team must take into account all of these ingredients while working with the site attributes and constraints, best use of land under current zoning, market demand and feasibility to deliver with healthy profit margins. Then think outside the box to meet a higher market demand and improve feasibility if possible taking into account the chances of development approvals increased time and holding costs.
If you get it right, They will come….. and reward you handsomely for your efforts
Opportunity abounds for those who are prepared and a major part of the prep will be to gather a team of trusted professional partners with the skills and experience to complement your own because with proper research the rewards are satisfying in more ways than one.
Never be so busy making a living that you forget to make a life, then together, we can make this world a better place.
Renovate or Detonate
When is demolishing a building the correct decision?
Strategies for redevelopment of existing dwellings can also include variations like lifting, sliding and relocation to maximise available building footprint and comply with town planning conditions.
Many property investors deliberate over the cheapest rebuild options instead of looking at the big picture to find the absolute best long term use and ROI for their chosen development.
As always, research is the key, including seeking specific advice from qualified professionals.
Listing possible scenarios for redevelopment and then eliminating via feasibility estimates and ease of development approvals will bring you closer to the answer than your own interpretation of the building inspection report and the local chippy taking a guess at refurb costs.
Once you have narrowed down your strategy enough to formulate a design layout, take the time to sketch site and floor plans for a few separate proposals. Take into account your budget, lending capacity, expected time lines for delivery, exit strategy, current market and similar project performance by way of a comparative market analysis.
Consult a qualified builder with similar project experience to give appraisals on your proposed renovation or building work including duplex and splitter options. Have your goals in mind but be sure to ask for recommendations on developing your property on a budget as their professional experience may offer insights and ideas you may not have realised were possible.
Ball park budget, project objectives and extent should be openly discussed at this stage to allow more efficient scheduling and cost estimates, remember a quick paint job and new toilet seat may satisfy a tenant but never a prospective buyer.
Once you have detailed the scope of the work, you can then decide to manage your own project or contract a registered builder?
Depending on the extent of building work you may be able to project manage your own renovation for work that does not require council building approval. Refurbishment of an existing home will generally not require council approval unless floor areas, bracing walls and roof lines are altered, plumbing fixtures being moved or altered can be self-certified by a licenced plumber. Bear in mind though Qld Building and Construction Commission laws require a licence to carry out any building work over $3300, discuss all proposed building work with a private certifier to be on the safe side before commencing any work.
Opportunity abounds for those who are prepared and a major part of the prep will be to gather a team of trusted professional partners with the skills and experience to complement your own because with proper research the rewards are satisfying in more ways than one.
Never be so busy making a living that you forget to make a life, then together, we can make this world a better place.
The Issue of Sales & Marketing – Stick to Your Strengths
While building work has been slower I have been reducing costs and moonlighting as my own marketing team.
As I ponder over website SEO, adwords, social media, magazine articles, blogging and constant lead generation tactics that take me away from my core skills as a residential Builder, I often wonder if we are all just more adept at blocking out the noise of advertising.
All the while I am reinventing myself as an online digital marketing guy instead of hammering nails into wood. Actually after thirty years in the building industry and the last eighteen years operating my own building company, I have moved up from the hammer to be quite proficient at the project management, sub-contractor and client management required for high-end residential work and small scale unit developments.
I find I am asking myself “do my clients want the best builder or the best marketing team?
This helped me realise my clients deserve the best builder and unless I rise above the noise of modern life and remind them of my existence they might just settle for a lesser quality product with an impressive wrapper. As business owners it is our duty to shout from the hills that we provide a specific service that adds value, solves a problem and is comparatively priced.
This is why we should stick to our strengths and employ others to complete tasks that we lack experience in. Building and development of property is the same, many people you know will have advice on the best way to approach your next investment project but unless they have recent experience their advice may not take in the big picture and possible pitfalls.
Opportunity abounds for those who are prepared and a major part of the prep will be to gather a team of trusted professional partners with the skills and experience to complement your own because with proper research the rewards are satisfying in more ways than one.
Never be so busy making a living that you forget to make a life.
Dual Key – Air BNB
Dual Key – Air BnB
Your guide to passive income
It’s official Air BnB the global room sharing app has disrupted short stay accommodation around the world and is driving down hotel rates at some of the larger chains. Airbnb is a website for people to list, find, and rent lodging. It has over 1,500,000 listings in 34,000 cities and 190 countries.
Now the average home owner can easily capitilise on this modern technology trend by cleaning out the spare room, creating an account and opening the front door to the world.
Air BnB landlords enjoy the increased activity and excitement of welcoming new people into their home on a regular basis and earning additional income from sharing part or all of your home has proven to be very popular helping the company grow exponentially since 2008.
Of course if personal space and privacy are important to you then renting out a room may not appear to be a viable option and when holiday renting your entire home seems like too much hard work, what are your options?
Dual key homes provide a completely separate part of your home, self-contained and fully council approved and are the most popular investment property trend. Traditional small development options were to build units, a duplex or even add a granny flat to an existing home to maximise the rental income available from a single allotment but the most affordable and cost effective is to build a new Dual Key Home.
Appearing from the outside like a conventional home and available in multiple configurations to suit land shape, style and budget, these multi-tasking homes are coming to a suburb near you.
New home buyers can appreciate the flexibility offered by the separate living spaces allowing guests, students or elderly parents to stay independently from the main home and maintain privacy or interact as desired.
Regardless of age, lifestyle, location or demographic this new style of home is in demand across the country.
First home buyers can more easily make home repayments with the added rental income.
Professional couples and investors appreciate the proven 30% increase in rental income which positions Dual Key Homes in positive cashflow territory.
The ability to downsize and earn additional income without relocating has many baby-boomers and soon to be empty-nesters excited about retirement.
Now while the upside is overwhelming, investing in property is a serious business with long term benefits and ramifications for the uninformed, research is the key to finding the location, property and finance that best suits your personal situation.
Do more than search online, drive or walk around your shortlisted suburbs to get a feel for the liveability of an area before entering a sales office.
Even if you are an investor who does not plan to live in the Dual Key Home look for a growth area with employment opportunities to ensure you can source the best possible tenants.
Schedule a meeting with your accountant or a (non-affiliated, full disclosure) financial planner to discuss tax incentives, depreciation schedules and potential capital growth scenarios.
When you are comfortable with your capacity and requirements investigate non traditional options online to buy wholesale property via Revalu8 which like Air BnB acts as a middleman for the sales process.
If you choose to purchase land to build on or an existing house/land package in an estate consider similar products available from competing agents and enquire about the building companies list of repeat clients (clients who have contracted the same home builder more than once) to ascertain if they were motivated by price or quality.
Be pushy, this is a huge investment of your time and money, ask for some contact numbers and gauge your decision based on the sales agents response or lack of.
If you do get some numbers give them a call, if not drive/walk the suburb on the weekend to find people washing cars, gardening and making improvements to their homes and casually ask the following –
I love your home, did you purchase this home new and who was the builder?
Ask about call-backs or issues during the build and how seriously they responded?
Would they build with them again or refer a friend?
Ask how do valuations stack up for home loans in this area which is a great way to tell if the sales packages are overpriced?
This is not generally a problem when buying from a land estate sales office but more common when purchasing at investment seminars spruiking house/land packages in a faraway “growth suburb” or boom town.
Remember slow and neat that’s the treat, investing is a long term strategy requiring thorough research before the purchase and regular monitoring of your asset during to ensure maximum gains are maintained.
Your future self depends on it and will be grateful for your patience and diligence while kicking back/sipping a drink in early retirement.
In the interests of full disclosure the author Royce Beale is a director of Optam Building Group
At Optam we design, build and develop residential property with a sustainable approach for lifestyle and investment
We strive to engage and support ongoing relationships with customers interested in long term strategy and building a portfolio of appreciating assets