Is your Property Development project on track? Is it making enough money to fund more projects and grow your equity? Property Development is an extremely rewarding business and if you are to make the most of it you will need to learn as much as you can.
Here are 18 ways you can improve profitability of your project.
1. Negotiate agent commissions.
Everything is negotiable. The only caveat is, if they don't get enough they may not do a good job. So win-win thinking here is best.
2. Watch and record all expenses like a hawk. Efficiency is the way of future.
3. Negotiate long term contracts with builders.
Or if you are like me and a builder-developer have a panel of contractors.
4.Buy appliances at auctions and store them until required.
Currently I don't have a space for inventory, so this is on the agenda.
5.Market research.
Know you market and give them what they want. For example a double garage in some suburbs is a must. If you don't provide it, you will be penalised by the market.
6.Go green.
Research indicate buyers will pay a premium for sustainable houses (this will be the next major wave of innovation in residential building practices).
7.Negotiate Lending rates.
Shop around. Half a percent on a million or two of lending adds up!
8.Rent houses while in planning stages.
Goes without saying, but you would be surprised how things can get out of hand.
9.Maximise sales prices.
Don't accept the first offer. Push back on the agents to go back and negotiate a better deal.
10.Sell completed.
If cash flow allows. Of course it may be prudent to sell off plan to minimise risk and exposure. However, the public really has a hard time visualising the end product, so selling completed will yield a higher price.
11. Understanding government policies and their implications
A good understanding of the government and council approval regulations and processes. These can be onerous! Understanding of tax legislation and financial markets and an ability to negotiate favourable borrowing facilities.
12. Build Houses currently favoured by the market
Identifying rental properties and/or land located in prime locations. Property investors and land developers should target property hat is attractive to targeted markets. I am planning an article to detail what the current market wants for a given type of dwelling.
13. Good project management skills
This is so important. Project management skills are important for those with negotiating approval processes, with construction activities and/or with building maintenance programs.
14. Effective cost controls
Property investors and land developers should have effective cost controls to maximise profitability. Efficiency is paramount.
15. Output is sold under contract - incorporate long-term sales contracts
Property investors can reduce risks by negotiating long term leases with strong tenants. Land developers can reduce risk by pre-selling lots.
16. Maintenance of excellent customer relations
Property investors should ensure a reasonable relationship between the landlord and tenant. I also focus on superior marketing. In business there are two major focuses. Marketing and Innovation. Think Apple.
17. Carrying out all necessary maintenance to keep facilities in good condition
Property investors should monitor the state of the property and ensure maintenance. If you are managing a property then maintenance programes are very important, it is tempting to do only the essentials, but at some stage the work must be done or the capital values will be affected.
18. Market research and understanding
Skill and knowledge to: understand the property market cycle; localised market conditions; landlord/tenant and/or land & building legislations and processes; tax implications; financial markets; and negotiate borrowing facilities. Be a student of the market and Property Development in general.
Finally think like an entrepreneur. Focus on innovation, doing things better, adapting ideas. They want to be rewarded for their success. You will need to be all of these things. Property Development is a very entrepreneurial activity. You need to visionary and see the end before anything has started. To be able to see the potential.
As a real estate developer you are a "specialist generalist". There are so many specialists which need to touch your project, so focus on keeping the good ones, building your contacts and relationships. It will pay off in superior quality.
Of course all of this is learn-able and scalable. You can start on small projects and work your way up. The sky is the limit.
I started with small renovation projects that involved repainting and building a picket fence. And worked my way up where I now manage 7 figure projects.
Boldness has genius, power and magic in it. Begin now.
Author Resource:-
Daniel Lock is a property coach, consultant and development manager. Offering results-driven coaching and consulting to people wanting to make money through property development. Find out how you can make serious money safely in Property Development at http://www.daniellock.com.au
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