What is the Property Development Process for New Residential Developments in Sydney?
Unlike selling or flipping a property, residential property development can be complex. Rather than just a few different processes, there are usually multiple different parties to coordinate, strict council regulations to deal with, and many other factors that make the entire field daunting, even for professionals. If you’re new to property development, the process can seem overwhelming and confusing, leading many people to go about property development from the wrong angle or quickly become disillusioned with the entire field. However, like any other process in any other industry, the residential property development process can be broken down into several different steps.
A step-by-step process makes it easy for new developers just starting in the industry to get familiar with the process and acquire the knowledge needed to succeed in the field. In this article, we’ll provide a brief overview of each stage of the residential property development process in the hopes that new property developers will absorb the information needed to grow their confidence and success.
5 stages of the property development process
Step 1: Research your development
Researching your development’s site is key for ensuring that there are no hiccups during construction or trouble with the marketing of the property. Before you officially purchase the site, research information that impacts the usability and attractiveness of the property.
Factors relating to the geographical area such as the crime rate, infrastructure and public transportation are important for residential developments as it can impact whether a family or young professional views the location as suitable to them. Additionally, carrying out a preliminary financial analysis, timing analysis and finding out information about the council approval process is helpful in determining the value of the site.
Step 2: Determine its feasibility
A feasibility study is a business plan for your development and demonstrates whether or not the development can return a substantial profit. This point is incredibly important if you also have the task of convincing investors that your proposed property plan is, in fact, a fruitful and sound investment.
To do the feasibility study, you will have to complete a market study, design a preliminary program for the project, set a target budget and milestones for different areas of the construction of the property, confirm zoning and other required approvals and organise your finances.
Step 3: Preparation for pre-construction
Once it is determined that the project will be profitable (through your feasibility study), you must prepare for construction. To do this, you will need to make the acquisition of the site final, acquire government and council approvals (e.g. Complying Development Certificate and Development Application) and contact builders and other professionals you require for the construction.
You will also need to begin pre-sales (off-the-plan apartments), engage an architect to design your vision, officially organise your finances and update your feasibility study accordingly.
Step 4: Construction of the project
Finally, your vision is coming true. In this stage, your project will become real as construction begins. While there is not much to do at this phase, it is quite an experience, especially if it is your first time, to see your work and planning come to fruition.
During the construction process, you will need to choose a building contractor, delegate a point of contact and possibly (depending on your budget), hire a project manager to coordinate different parties, monitor the construction site and oversee the construction process until handover.
Step 5: Marketing and selling of your development
To effectively market and sell your property, you will need to research your target market, create marketing methods and channels geared towards the target market, and execute a sales campaign. These are the steps it takes to prepare an effective marketing plan for your development that will lead to the selling of your properties and eventually to a substantial profit. This is also the stage where you can celebrate the end of the property development process and your success with the upcoming sales.
The residential property development process is certainly a complex one. Property developers take years of training and expertise to master this process and the craft of making a profit on property development. We hope that by identifying the stages of this process, property developers who are new to the field are better able to determine whether they are cut-out for the field and see it as a life-long career. To learn about property development and the types of projects that you can be a part of, read more about us.