If you've followed me for any length of time (even a short one!) then you'll know one of my favourite sayings is "just because it's developable, doesn't mean it's profitable". This philosophy underpins everything I teach.

As a result, doing your numbers in the form of a feasibility spreadsheet is a vital part of your search for a property development site.

And a vital part of that feasibility is to find comparables for your end product, whatever that might be.

Which then leads on to another question in the long list of questions I'm often asked - "Rob, what do I do if I can't find any comparables?"

Let's start with the absolute basics - what is a comparable? Once you've done your research and become an Area Expert, then you will know what sort of product you need to develop to satisfy the area's demographic.

As an example, let's say you need to develop 2 bedroom, 1 bathroom single-storey units for an older demographic who are downsizing from big family homes.

For comparables, you need to look at recently sold properties that have 2 bedrooms, 1 bathroom and are single-storey. Essentially you're looking at the same property you're planning to develop - two identical apples.

If you look at 4 bedroom, 2 bathroom double-storey homes, then that's an orange. While looking at oranges might be fun, comparing it to an apple doesn't tell you anything. People in the area want to buy apples, and they're not going to pay orange prices for them.

If you ignore that and plug orange prices into your feasibility spreadsheet, you're going to end up with a result that is far too optimistic in terms of resales. That might make your numbers look a lot healthier, but they're not real - essentially, garbage in, garbage out.

Hopefully now we're clear on what a comparable is and why you need to be realistic about them. So it's back to the original question - what if you can't find any?

A lack of comparables can be due to lack of stock in the area, or lack of sales data that matches the price point you want to achieve. So there's a couple of different ways to tackle this problem.

Expand Your Search Radius

Increase the geographic area you're searching in. Sometimes, similar properties may be located a bit farther away from your project. Keep in mind the possibility that if they're further away, other factors come into play.

As an example, if your property is 2km from the beach, it's not going to be at the same price point as the same type of property 100m from the beach.

Expand Your Timeframe

Look for sales data over a longer period. This is particularly relevant if the end product of your development project is relatively uncommon in the area. Add in the fact that properties, on average, turn over every 7 years, and that can mean it's tough to find a lot of recent comparables.

By expanding your timeframe (say going from 3 months to 6 months) you have a better chance of finding a few apples lurking in the results.

Consult with Local Real Estate Professionals

Real estate agents often have valuable insights into the local market and can provide guidance on finding appropriate comparables. They can tell you about recent sales that may not have flowed through into various sales data or property indicators yet, allowing you to get up to date numbers for your development product.

Good ones can also give you a lot of other information about your development project. I've certainly had agents tell me the sort of product they believe buyers are looking for, which can help you decide what shape your development should take. If they've had a lot of enquiries they may even be able to help you estimate what something might sell for, if it's not a common product in the market.

Being an Area Expert is a big help in this regard - you will already have a strong network of agents in the area you can contact to find out background information.

Adjust for Differences

If you're building a unique, new or specialized property, broaden your search to include similar property types even if they're not identical. Make adjustments to account for those variations. For example, adjust for factors like size, condition, location, or amenities. Using this method, nearby or similar developments that share characteristics with your project can offer some basis for comparison.

Surrounding Suburbs

This idea overlaps a little with expanding your search radius, but taking a look at surrounding suburbs might also be useful if they contain similar product to yours. By collecting comparables there, you can potentially adjust the price level up or down to give an idea of a price point for your suburb.

For example, say oranges in the next door suburb sell, on average, for 10% more than oranges in your suburb. Now you find a bunch of apples in that suburb and work out the average price. Reduce it by 10%, and you should have at least a rough idea of what apples are likely to sell for in your suburb.

These are just a few ideas to get you started, and keep in mind that nothing beats exact comparables when doing your feasibility. But working out comparables is both an art and a science, and it often requires a combination of approaches. It's important to be flexible and open to different methods when exact comparables are hard to find. Have fun finding the best, juiciest apples available!