Property Development: Pre-purchase consultation advice is key
The property development world is booming with opportunities and high hopes for those who’ve done their due diligence and are ready to dive in. Providing a service within in the field, we understand that the most critical step for the property development process is in the research and planning stage before you acquire the property. A ‘feasibility study’ is a key component of a thorough due diligence phase of property acquisition. Your ‘feasibility study’ is the business plan of your development which will determine whether your proposal is viable, needs a change of direction, or should be reconsidered.
The novice property developer will all too often not appreciate or understand the importance of acquiring professional consultation advice prior to purchasing the property, which can result in disappointment and financial stress if the wrong property is acquired.
The three key consultants you should engage in your due diligence period are:
- A town planner;
- An architect; and
- A civil engineer.
Your key consultants, working together as a team, will help you answer the following questions:
- Do the town planning regulations permit the type of development you are proposing? For example, can I demolish that existing house or is it protected? Is the site suitable for a multi-residential development, or is it a splitter block? Are there local heritage or character requirements which will affect the design of the proposed development?
- What is the estimated yield and layout for the site? For example, can I fit 2 or 3-bedroom units on site? Can I fit the minimum number of carparks required? What is the ‘worst case scenario’ yield for my site, and what is the ‘best case scenario’ yield for my site?
- Are we able to resolve the site services such as sewer and stormwater in order for the development to be approved? Are there flooding issues on this site?
Failing to identify site specific problems applicable to your potential development can be the downfall to getting your development off the ground.