Is getting started in property development right for you with Bryce Yardney
Aug 24, 2020
Have you ever thought of getting involved in property development?
That’s what I’m going to talk about today with Bryce Yardney, director of Metropole Projects.
We’re seeing more and more people interested in property development because, in times of flatter capital growth, you’re looking to manufacture capital growth.
Today we’re going to talk about some of the risks involved in property development.
Property development involves a wide range of activities and processes and in order to be successful, you’ll need to know about the market, the property, economics, finance, town planning, construction, and even marketing.
It’s difficult, but if you have a good team around you and you have the finance to do it, property development is a great way to build your assets and buy your next investment at wholesale.
Hopefully, today’s show will give you some insight into whether property development is for you, now or sometime in the future.
Some of the common risks of property development that we discuss:
- Mistaking precedent for permission: The rules can change. Just because somebody else did it doesn’t mean that you’ll be able to do it.
- Not understanding what “subject to council approval” means: “Subject to council approval” is like the word “but”. Anything that comes before it is meaningless. You need to understand the council you’re getting into and understand something about town planning – or at least have someone on your team who does.
- Not being cautious about competitive developments
- Delivering the wrong product to the market: Remember, it’s not about what you would want. You need to understand what the market really wants
- Not anticipating bank hurdles: The banks are currently more difficult than They’re afraid of what’s going on and more conservative than usual. Borrowing is not impossible, but you need to be prepared for a number of hurdles.
- Not understanding what goes into choosing a builder: There are three big factors that go into choosing a builder. These are quality, time, and dollars. Don’t get so hung up on dollars that you sacrifice the quality.
- Not having enough money for upfront costs: Banks don’t lend for soft costs, like stamp duty, interests, consulting costs, etc, so you need to allow for enough money upfront to handle these expenses, that can run into the tens of thousands.
- Underestimating the power of the council
- Not employing a project manager
- Not know what you don’t know: That’s why you need somebody around you to help you – someone who will know the things that you don’t know.
Links and Resources:
Interested in getting started in property development? Find out more here
Bryce
Yardney – Director Metropole Projects
Metropole’s Strategic Property Plan – to help both beginning and experienced investors
Shownotes plus more here: Is getting started in property development right for you with Bryce Yardney
Some of our favourite quotes from the show:
“In my mind, one of the biggest risks in development is actually the developer: you, the person listening to this.” – Michael Yardney
“Once you get it and it works, and you’re manufacturing equity and you’re getting good cash flow, it actually can almost be a self-perpetuating machine.” – Michael Yardney
“Enjoy the journey, because if you don’t enjoy the journey, you’re not going to appreciate the destination when you get there.” – Michael Yardney
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