WA Perth Development Options

Hi all

Im looking to start my 1st project ideally 2-3 units subdivisions.

Wondering what's the suggestion on entry level suburbs you would recommend and what to look out?

Understand the current market is going nuts and construction costs is sky rocket, my plan is to secure a land in the next 3-6 months then start the project.

What's the major issues I should look out and which areas is the best to get in?

Thanks in advance!!!

 

I'd start with finance-ability (made up word!) first. You need to understand the difference in how much deposit you need between 2 units and 3 units. They are quite different!

Then you need to know how to do a feasibility to ensure there is adequate profit. And how you plan to handle taxation issues such as GST, income/company tax.

Then you practise running those numbers over areas and don't get disheartened when you find that 95% of ones you look at don't make enough money.

What do you define as entry level suburb? Is it a price point? Whilst everyone has a limit to how much they can borrow the total amount can mean a duplex in a better area is better than a triplex in a not so good area.

 

Just engage Westy to PM. That's what I'd do if I'm looking to do a project in Perth. Leveraging expertise (especially as a newbie) is very powerful.

 

depending on your budget???? Coolbellup was cheap 12 months ago but today perhaps looking at high 500s, house/deve site, build new at rear


As a newbie…..I would consider looking at properties where you can retain house and build new house at rear. Its going to be tough for numbers to stack up today but this is I believe a lower risk strategy

Once you buy etc I would utilise Council services, planning dept, these guys can be extremely helpful.

Becareful with building today, just cos you sign a build contract does not mean prices wont go up

I would consider buying a deve site, with a house on it, rent it out…… rising market….. boom
Then build when build prices stabilise

BTW….. concrete has just gone up, extra $60k on my friends project….. ouch

 

Thanks for the informative respond. I have spoken with my broker and he suggested I can look into approx. a $1.5 - $2M project. Based on this number Im starting to research on areas and I would like to engage an expert throughout the journey, at this stage I am just running numbers and hoping to get more ideas on the areas and see what are the potentials
Thanks a lot for the advice

 

Thanks MTR, this is interesting. However my intention is to build then flip and not intended to hold any asset for a long run. I currently own a land which I want to build a Childcare center in the next few years however I need more capital hence Im trying to squeeze a few projects in between trying to build up more $$ plus company background in order to be more favorable when it comes to lending. " Advices from my broker and accountant"

Understand the current market and construction has gone mad, hence Im still weighting up all the pros and cons and need professional advices from you guys
Much appreciated!!

 

FORCE MAJEURE – “THE BACK DOOR CLAUSE"

If builder don't have that in their clause in today's climate.
You will be bankrupt in 24 months. That is almost a guarantee.

 

We have had a few larger builders go under, over extended, and under quoted

 

So I reckon this makes it especially tough. I haven't seen much at all that would reliably stack up as profitable. And I look at every suburb in Perth.

 

You have to pick up something which is under market value, very difficult in todays market

 

I'd say that but also a few other planets to align too!

 

Thanks again!!
Let's say for a $800k budget, what suburbs should I keep an eye out?

 

With the amount of listings and options, you could probably just search all of greater Perth with your budget and it wouldn't take long to look at all of them!

 

Agree, but the problem is...in this current market, by the time you ran all the numbers and DD checks, the property would have gone under offer, better to engage an expert to work with you along the way.

 

Honestly, if you're not ready to be able to at least do the initial numbers and DD checks, then I don't think you're ready to do a development.

Development is very much a team game - but I would never consider contracting out the core feasibility figures to someone else.

I don't get your strategy here - who were you going to get to do your feasibilities?

 

Good budget
What the bum said

 

Thanks mate! I would like to start learning myself hence I just completed the Estate Master course. However I have limited practical experience and unsure which part I should engage someone, perhaps like you said I should seek for PM and prior to that I can run initial feaso myself?
May I ask do you guys normally pay for builders/surveyor/planner on initial consultation? Seems like in this current market no one would do a free quote...

 

Just to add on, Im willing to do all the hard works myself, however Im not an expert on building and I will need quailed surveyor assessment right? wondering based on your experience when should I engage these professionals?

 

I don't know much about these courses - what do you learn exactly?

But I'd say you want at a minimum be able to fairly accurately evaluate 3 main things yourself:

1. The current value of a site you're considering to buy
2. What can be built on the site in planning terms (so knowledge of the Rcodes etc); and
3. The likely end values of the product you're developing to sell.

I mean you can obviously get help with some of the above, but if you have very little idea yourself, then you're really risking a lot of money and trusting third parties to an extraordinary degree.

 

Who would you consult to do a feasibility?

Personally I just stuck my head in (made mistakes but thankfully all mistakes were compensated by rising markets)

Even with experience when first looking at WA did talk to builders who gave me an idea but even they turned out to underquote the crap outta me (I would say 50/50 on rising prices and underquoting) but again things evened out with rising markets