I bet you read that headline and immediately thought "Yes! I want the shortcuts! I want to be successful yesterday!"
Well, I hate to burst your bubble, but reality doesn't work quite like that. And that's something mega successful Property Developers know and recognise right from the beginning. Unless they learn it the hard way of course!
So how DOES reality work?
Okay, I'm not really going to explain how reality works, I don't think anyone knows that! But what I can do is explain why mega successful Property Developers don't go looking for shortcuts. Long-term success in property development comes from knowledge, systems and experience rather than shortcuts.
As a Property Developer, you're always keen to get the best return possible for your money. Why do a development in suburb A and get a profit of $50k, when you can do a development for the same amount of money in suburb B and walk away with $200k, right?
It's easy to fall into the trap of looking at Property Hotspot lists and advice from other experts to try and shortcut the process of finding suburb B. The problem is, their recommendations don't necessarily match what you're looking for. Many general property investment tips don't align with property development strategy requirements.
Most market commentary is based on market indicators and is written for property investors. Why is that an issue for you? For starters, market indicators are pulled from what's already happened in the marketplace. So any growth showing up in an indicator is potentially already over before you even buy there. What you need to be looking at are market drivers, which are the factors which cause the market to move upwards. Understanding property market drivers is critical for identifying property development opportunities early.
Some local market drivers include:
By understanding this type of information for an area, you will be able to make an informed decision about the likelihood of growth and development opportunity there.
Also, experts are talking to Investors. These are people following a long-term buy and hold strategy. If it takes a few years for prices to start moving again, it's not too important because they're in for the long haul.
As a Property Developer, though, you're looking to be in and out of a project within a much shorter time frame. So being an area expert, and knowing where the drivers are showing growth is likely to happen, is an important part of buying your development site. This is why suburb analysis for property development is different to traditional investing.
With your strategy in mind, you can then find councils within that area which have planning requirements and opportunities that match your strategy. Finally, you keep drilling down to suburb level, and that's when you can separate suburb A from suburb B.
Sounds like there's some work involved in finding out all that information, right? Yes, there is. But it's being an area, council and suburb expert which makes it so much easier for mega successful Developers to know within minutes whether a site is going to work. If they had to go off and do that level of research everywhere in a city where a random opportunity pops up, they'd miss all the good deals. Becoming an area expert is one of the most valuable skills in property development.
In some ways, they create their very own shortcut! It just takes a lot of hard work upfront to set it up. The good news is that achieving that level of detailed knowledge for an area and suburb only has to be done once. It means if an agent rings you with an off market deal, you can immediately know if it's a cracker of a deal, and get it under contract.
Whereas the people who relied on a shortcut and don't have the knowledge are still doing their research. If you feel like you're always missing out on development deals because someone else gets in first, this could be a good thing to focus on.
But wait! I hear you cry. Can't you just outsource the research to someone else? That way you'd have all that information without having to do the work. How about that for a shortcut?
Look, I'm not going to lie - I love outsourcing! It's the way I manage to do all that I do so efficiently. The only problem with it in this scenario is that although you have the data, you don't have the intimate knowledge of an area that only comes from doing the hard yards yourself. Things like sitting in a local cafe and chatting to locals so you can find out where the good and bad areas are. And it's that depth of knowledge which is key to making quick decisions when potential development opportunities arise.
If you want to learn how to analyse areas and identify opportunities, our free 7 Step Development FORMULA course walks you through the fundamentals of strategy, suburb selection and feasibility.
And the next shortcut suggestion is inevitable - why not just use a Buyer's Agent then? I get it. No hard work on your part, the Buyer's Agent just rocks up with suggested properties.
Please don't take what I'm about to say the wrong way - there are good Buyer's Agents out there. But there are also a heck of a lot that don't know very much about property developing. They don't understand feasibilities, and they often don't understand that just because something is developable, it's not always profitable. Property development feasibility analysis is essential before committing to any deal.
Now, if you've done the work and know exactly what kind of property you're looking for in terms of location, size, zoning and price, then outsourcing the task of finding development sites that match your criteria can be a good way to free up your time.
It comes down to delegation vs abdication. When you delegate, you already know the task and what's required because you've either done it yourself or have a thorough knowledge of what's required. When you abdicate, you hand over a task without really having a clue what's needed and hope the person taking it on does.
Bottom line, it's the six or nine months of lead time that goes into locking in your strategy and locking in your skills and locking in your area of expertise and understanding what your council rules are, that then allows you to make really quick and profitable decisions. It also makes it possible for you to confidently delegate or outsource some of the tasks needed to source development sites. This foundation is what allows experienced developers to move quickly on high-quality opportunities.
But there's no magic pill, no magic wand, no shortcuts. Once you've done the hard work, though, the rewards will make it all worthwhile. Trust the process, and you'll be a mega successful Property Developer.
Well, I hate to burst your bubble, but reality doesn't work quite like that. And that's something mega successful Property Developers know and recognise right from the beginning. Unless they learn it the hard way of course!
So how DOES reality work?
Okay, I'm not really going to explain how reality works, I don't think anyone knows that! But what I can do is explain why mega successful Property Developers don't go looking for shortcuts. Long-term success in property development comes from knowledge, systems and experience rather than shortcuts.
As a Property Developer, you're always keen to get the best return possible for your money. Why do a development in suburb A and get a profit of $50k, when you can do a development for the same amount of money in suburb B and walk away with $200k, right?
It's easy to fall into the trap of looking at Property Hotspot lists and advice from other experts to try and shortcut the process of finding suburb B. The problem is, their recommendations don't necessarily match what you're looking for. Many general property investment tips don't align with property development strategy requirements.
Most market commentary is based on market indicators and is written for property investors. Why is that an issue for you? For starters, market indicators are pulled from what's already happened in the marketplace. So any growth showing up in an indicator is potentially already over before you even buy there. What you need to be looking at are market drivers, which are the factors which cause the market to move upwards. Understanding property market drivers is critical for identifying property development opportunities early.
Some local market drivers include:
- population growth
- supply and demand
- employment opportunities
- major infrastructure spending
By understanding this type of information for an area, you will be able to make an informed decision about the likelihood of growth and development opportunity there.
Also, experts are talking to Investors. These are people following a long-term buy and hold strategy. If it takes a few years for prices to start moving again, it's not too important because they're in for the long haul.
As a Property Developer, though, you're looking to be in and out of a project within a much shorter time frame. So being an area expert, and knowing where the drivers are showing growth is likely to happen, is an important part of buying your development site. This is why suburb analysis for property development is different to traditional investing.
With your strategy in mind, you can then find councils within that area which have planning requirements and opportunities that match your strategy. Finally, you keep drilling down to suburb level, and that's when you can separate suburb A from suburb B.
Sounds like there's some work involved in finding out all that information, right? Yes, there is. But it's being an area, council and suburb expert which makes it so much easier for mega successful Developers to know within minutes whether a site is going to work. If they had to go off and do that level of research everywhere in a city where a random opportunity pops up, they'd miss all the good deals. Becoming an area expert is one of the most valuable skills in property development.
In some ways, they create their very own shortcut! It just takes a lot of hard work upfront to set it up. The good news is that achieving that level of detailed knowledge for an area and suburb only has to be done once. It means if an agent rings you with an off market deal, you can immediately know if it's a cracker of a deal, and get it under contract.Whereas the people who relied on a shortcut and don't have the knowledge are still doing their research. If you feel like you're always missing out on development deals because someone else gets in first, this could be a good thing to focus on.
But wait! I hear you cry. Can't you just outsource the research to someone else? That way you'd have all that information without having to do the work. How about that for a shortcut?
Look, I'm not going to lie - I love outsourcing! It's the way I manage to do all that I do so efficiently. The only problem with it in this scenario is that although you have the data, you don't have the intimate knowledge of an area that only comes from doing the hard yards yourself. Things like sitting in a local cafe and chatting to locals so you can find out where the good and bad areas are. And it's that depth of knowledge which is key to making quick decisions when potential development opportunities arise.
If you want to learn how to analyse areas and identify opportunities, our free 7 Step Development FORMULA course walks you through the fundamentals of strategy, suburb selection and feasibility.
And the next shortcut suggestion is inevitable - why not just use a Buyer's Agent then? I get it. No hard work on your part, the Buyer's Agent just rocks up with suggested properties.
Please don't take what I'm about to say the wrong way - there are good Buyer's Agents out there. But there are also a heck of a lot that don't know very much about property developing. They don't understand feasibilities, and they often don't understand that just because something is developable, it's not always profitable. Property development feasibility analysis is essential before committing to any deal.
Now, if you've done the work and know exactly what kind of property you're looking for in terms of location, size, zoning and price, then outsourcing the task of finding development sites that match your criteria can be a good way to free up your time.
It comes down to delegation vs abdication. When you delegate, you already know the task and what's required because you've either done it yourself or have a thorough knowledge of what's required. When you abdicate, you hand over a task without really having a clue what's needed and hope the person taking it on does.
Bottom line, it's the six or nine months of lead time that goes into locking in your strategy and locking in your skills and locking in your area of expertise and understanding what your council rules are, that then allows you to make really quick and profitable decisions. It also makes it possible for you to confidently delegate or outsource some of the tasks needed to source development sites. This foundation is what allows experienced developers to move quickly on high-quality opportunities.
But there's no magic pill, no magic wand, no shortcuts. Once you've done the hard work, though, the rewards will make it all worthwhile. Trust the process, and you'll be a mega successful Property Developer.
