There are always opportunities to source an ideal development site in the Perth Metropolitan area, however you may want to consider 5 key factors that could influence the profitability of the project.
5 key factors to source the ideal development Site
The most important factor in sourcing a suitable development property is the location. Consider locations that have potential for capital growth or would be suitable for rental tenants.
Some factors to take into consideration are:
- Public transport – including high frequency bus routes and train stations.
- Main arterial roads.
- Employment opportunities.
The zoning will determine how many units you will be able to build on your proposed development site. It is important that you understand the R-codes and zoning that applies to any property you are purchasing to ensure that the subdivision will support the proposed number of new lots.
It is also important that you are aware of any local government regulations that may apply to an area that will restrict how you develop the site. Ensure that you understand any proposed changes to zoning or planning regulations in the local government area that could either improve or hinder the profitability of your development. This is particularly important if you are not going to develop the block right away.
Certain councils have recently undergone zoning changes which could positively affect the profitability of a chosen block. The City of Swan, City of Melville, City of Wanneroo and the City of Cockburn have all made such changes.
3. Total price including site costs
Being aware of all your costs is imperative to understanding how much potential profit is in the transaction. Many general works items or site costs are not factored into some builders quotation and these costs will be introduced to you later in the process. Ensure you are informed upfront of ALL costs and are working with a builder that has extensive experience in development sites.
The cheapest development site may not represent best overall value in a development project. Items that are not as visible such as retaining walls, drop footings, brick buildups, and traffic management are a few items that attract large costs, which may impact your development project negatively. Considering an holistic view when approaching a development and partnering with an experienced builder are solid foundations to a successful project.
The shape of the property may determine how many units are capable of being constructed on the site, irrespective of the R-Codes and zoning.
Shape may not only restrict the number of units capable of being built, it may affect the design and configuration of the unit, possibility requiring a two storey or a shape that is not appealing. Either possibility may impact negatively on the overall profitability of the project.
Why not talk to a builder that understands these challenges before you purchase a development site or proceed developing your own property.
The topography is the slope of the block. If a site is very steep it can also limit the amount of units that can be developed. It may also mean that the site will require retaining, which will add to the site works costs.
If you are buying a block that has an existing house on it, sometimes it is hard to gauge the topography of the land when there is a house and garden already established. If you are unsure and there are no land survey details available, make sure you speak to an expert to reduce the chance of nasty surprises once the block is cleared.
Ventura iD and Multi Living Developments offer a free consultation service so you can see if developing is an option for you. Call (08) 9241 1600.