When people come to me and say "I want to be a Property Developer" they're often gobsmacked when I ask them “What type?”. Because in their minds, those two words cover everything.
Yes, there's lots of different strategies you can use as a Property Developer, and there's not just one path to follow from start to finish and you're done. Let’s face it… no two Property Developers ever take the same journey.
But, which is better - learning and applying a single strategy, or learning multiple strategies and applying them all?
When you're starting out, the sheer amount of information to learn about how to become a property developer can be overwhelming. And the fact is, almost any property development strategy can make money for you in the right place at the right time. But remember - just because it's developable, doesn't mean it's profitable!
This sheer abundance of opportunity tends to lead to something known as "shiny object syndrome". This generally takes the form of someone spending countless hours on realestate.com.au hopping around looking at anything and everything with development potential. You just get focused on one deal when *sparkle* another deal catches your eye and you go off to investigate it.
Now, at first glance this might actually look appealing. After all, the more deals you look at, the more likely you are to find a good one, right? Up to a point, yes. The problem is that for every deal you find, you have to do your due diligence.
If you're doing it properly, you need to understand the area the deal is in, and what the rules are so you feel confident about what can be done to develop the property. Is it in a good part of town or the "wrong" one? Do the demographics of the area support the type of development you're planning? And that's only the start.
In my Property Development Formula program I teach students how to do a 10 minute check so they know whether to keep or discard a potential deal right from the get-go. But for that to be effective, you need to already be an expert on that Council and in that Suburb.
If each property development deal you find online is in a different area, then you're going to spend a big chunk of time trying to get rapidly up to speed about the Council and Suburb every time you find a new deal. Time that's wasted if it turns out the deal isn't profitable in that area. Essentially, you're on a giant wild goose chase, and you'll burn a lot of effort in the process.
And look, I get it. We've spent a lot of our lives learning things through trial and error, until we find the most productive way to do something. Trouble is it can take a long time to get traction doing things that way, and potentially it gets so tedious that you burn out and give up before you even get started. Or, even worse, lose money on your first deal because your due diligence was only surface level.
Here's a great graphic that shows what I mean: Effort Vs Effectiveness
This graphic demonstrates very clearly that if you put a lot of effort into a lot of different tasks, then the effectiveness of your effort in each endeavour is minimal. Whereas if you pick a small number of tasks, then you can concentrate your effort and be far more productive as a result.
In common terms, this is known as "Jack of All Trades, Master of None".
In case you haven't already guessed it, my guidance is always to choose a single strategy, and get to know that strategy really, really well. Most of us lead busy lives, so the time you invest into your budding property development career should be used as effectively as possible.
Once you've chosen your strategy, do the work to find one Council and three suburbs in that Council where the numbers stack up. Then put all your effort and energy into finding deals that match your development strategy, Council and Suburb.
As the earlier graphic showed, by approaching your research in this way, you'll get the maximum results out of the time you have available for property development. Another way of expressing this is to keep your strategy very narrow and go very very deep into that strategy. The same amount of effort will get much better results for you than spending the same amount of effort pursuing multiple strategies.
Does this mean that in your whole career as a Property Developer you'll only ever do the same type of deal in the same area? No, although there are people who've done very well with that approach. But as Heraclitus once said "change is the only constant in life". It might be that prices in the area change, and suddenly the numbers don't stack up so well any more. Demographics change, so the market might not want your product any longer. Or you get bored!
That's okay. As your knowledge and skills grow, you can move on to a bigger version of your main strategy. After all, building townhouses is still the same strategy, whether you're doing 2, 6 or 20. It's the scale that changes. It might just be that the bigger version needs to be implemented in a different area to be profitable.
So the secret as you start on your journey to becoming a successful Property Developer is to focus on one single development strategy in an area where you've done the research to know it works, spend your time finding sites in that area that are both developable and profitable, and grow from there!
And if anyone has a word that means "Success" but starts with an E, let me know.
Yes, there's lots of different strategies you can use as a Property Developer, and there's not just one path to follow from start to finish and you're done. Let’s face it… no two Property Developers ever take the same journey.
But, which is better - learning and applying a single strategy, or learning multiple strategies and applying them all?
When you're starting out, the sheer amount of information to learn about how to become a property developer can be overwhelming. And the fact is, almost any property development strategy can make money for you in the right place at the right time. But remember - just because it's developable, doesn't mean it's profitable!
This sheer abundance of opportunity tends to lead to something known as "shiny object syndrome". This generally takes the form of someone spending countless hours on realestate.com.au hopping around looking at anything and everything with development potential. You just get focused on one deal when *sparkle* another deal catches your eye and you go off to investigate it.
Now, at first glance this might actually look appealing. After all, the more deals you look at, the more likely you are to find a good one, right? Up to a point, yes. The problem is that for every deal you find, you have to do your due diligence.
If you're doing it properly, you need to understand the area the deal is in, and what the rules are so you feel confident about what can be done to develop the property. Is it in a good part of town or the "wrong" one? Do the demographics of the area support the type of development you're planning? And that's only the start.
In my Property Development Formula program I teach students how to do a 10 minute check so they know whether to keep or discard a potential deal right from the get-go. But for that to be effective, you need to already be an expert on that Council and in that Suburb.
If each property development deal you find online is in a different area, then you're going to spend a big chunk of time trying to get rapidly up to speed about the Council and Suburb every time you find a new deal. Time that's wasted if it turns out the deal isn't profitable in that area. Essentially, you're on a giant wild goose chase, and you'll burn a lot of effort in the process.
And look, I get it. We've spent a lot of our lives learning things through trial and error, until we find the most productive way to do something. Trouble is it can take a long time to get traction doing things that way, and potentially it gets so tedious that you burn out and give up before you even get started. Or, even worse, lose money on your first deal because your due diligence was only surface level.
Here's a great graphic that shows what I mean: Effort Vs Effectiveness
This graphic demonstrates very clearly that if you put a lot of effort into a lot of different tasks, then the effectiveness of your effort in each endeavour is minimal. Whereas if you pick a small number of tasks, then you can concentrate your effort and be far more productive as a result.
In common terms, this is known as "Jack of All Trades, Master of None".
In case you haven't already guessed it, my guidance is always to choose a single strategy, and get to know that strategy really, really well. Most of us lead busy lives, so the time you invest into your budding property development career should be used as effectively as possible.
Once you've chosen your strategy, do the work to find one Council and three suburbs in that Council where the numbers stack up. Then put all your effort and energy into finding deals that match your development strategy, Council and Suburb.
As the earlier graphic showed, by approaching your research in this way, you'll get the maximum results out of the time you have available for property development. Another way of expressing this is to keep your strategy very narrow and go very very deep into that strategy. The same amount of effort will get much better results for you than spending the same amount of effort pursuing multiple strategies.
Does this mean that in your whole career as a Property Developer you'll only ever do the same type of deal in the same area? No, although there are people who've done very well with that approach. But as Heraclitus once said "change is the only constant in life". It might be that prices in the area change, and suddenly the numbers don't stack up so well any more. Demographics change, so the market might not want your product any longer. Or you get bored!
That's okay. As your knowledge and skills grow, you can move on to a bigger version of your main strategy. After all, building townhouses is still the same strategy, whether you're doing 2, 6 or 20. It's the scale that changes. It might just be that the bigger version needs to be implemented in a different area to be profitable.
So the secret as you start on your journey to becoming a successful Property Developer is to focus on one single development strategy in an area where you've done the research to know it works, spend your time finding sites in that area that are both developable and profitable, and grow from there!
And if anyone has a word that means "Success" but starts with an E, let me know.
