Multi Unit Developments, Where Do You Start?
June 30, 2015 at 10:03 AM
We have completed lots of Multi Unit Development plans/developments in the Perth metropolitan area and found many variables drive investors decisions to go ahead or not with such a development type.
I seriously recommend these variables are understood and considered by undertaking a detailed feasibility study before an investor decides to actually purchase a site or plan to go forward to a design for a site they already own.
A detailed feasibility study process identifies and considers key factors required to make a Multi Apartment development a success. Some of the considerations but not all are highlighted in the following few paragraphs.
Initially investors should have a good idea of cost of development, this is obvious but often misjudged and understated driven by inexperience or over optimism.
The site’s characteristics, individual local and state government department requirements, additional infrastructure charges and others often drive unforeseen costs, which should be factored, into the cost estimate of development.
For example, a potential investor needs to be certain that their potential Multi Unit development site has minimal development limiting characteristics. Such as extensive site easements, being sections of a development site over which buildings cannot be built, or can be built but at higher expense thus rendering the site’s development potential uneconomic.
Further an investor should be aware of individual City Planning requirements not always clear at the outset, but can severely limit for example the number of units or their size which can be built on the site or that the additional unknown requirements creates additional cost and delayed Development Approval.
There are many more on my list to be “ticked off”.
Are you going to make a profit? How are you going to find out?
Are you a seller or a keeper? This question is critical to the planning phase because it influences many outcomes in a Feasibility Study?
These are just a few of the many key factors to be considered, measured and understood before setting out to undertake any redevelopment of a property
It is my experience that Multi Apartment developments and or Units in the Perth metropolitan area can be undertaken and be highly successful, you just need to do your homework and be thorough. A considered detailed Feasibility Study is where you should begin.
If you would like to know more about how we can help you, contact us now
Managing Director of New Home Building Brokers