There's a common misconception in the industry that a development application (DA) will give you an instant uplift in the value of a property. I'm here to tell you that in many, many instances, that simply isn’t the case.
I've even seen instances where obtaining a DA has actually been detrimental to the property’s price because it's given insights into a property that have highlighted some issues and challenges.
On the flip side, I’ve also seen instances where obtaining a DA has produced a very handsome profit, so it’s a valid strategy. You can buy a site, put in a development application and then flick the property once it’s approved. Maybe you don't have the confidence or the money to take it all the way through to construction. Luckily, there are others who don't want the risk of the development approval stage. They want to buy a DA-approved site and take that through to construction and completion. Again, a perfectly valid strategy.
Knowing those two kinds of people actually exist, you've got to make sure that each person is going to get fed in the food chain, and still leave enough money on the table for the next person. So how much is that?
Well, that's the million-dollar question…