What is Property Development?
According to the Collins English dictionary property development is “the business of buying land and buildings and then making improvements to them so that their selling price exceeds the price paid for them”. Sounds simple enough! So why do so many get it so wrong? I hope not only to resolve the mystery in my soon to be released book “How to do Property Development (and still keep your shirt, your family and your friends)”, but also show you how to do it correctly in my 3-day Property Development Workshop!
The key word in the above description is “business”. I have come to realise that Property development is not a one off “project” that you undertake. It is a business and can consist of one or multiple projects. However, like any business, it needs a CEO or a Managing Director. Somebody who is in charge, but more importantly someone who is responsible and accountable for the success of the business. That person is you, the Property Developer
By definition then, if you’re going to start a business you will need the necessary skills to manage the business and not just a construction Project. Indeed, many new comers to the industry are pleasantly surprised to learn that they already possess quite a lot of the skills that they will need to succeed as a property developer, and they just need to learn how to apply those skills to a new task.
Does it take a “special breed” of person to become a successful Property Developer?
I spent three years in the Land Environment Court doing battle over an Easement with the local Council (which I discuss in more detail later my Workshop), and I remember asking my Solicitor, who was an expert in Land Environment Court matters and very knowledgeable about planning matters, if he had ever considered doing Property Development himself. His answer was a very respectful, almost in awe, reply “No, it’s not for me. It takes a special breed of person to do property development”. I will leave it to you to make up your own mind on that as you work through some of your own future Projects. But suffice to say that a successful developer commands a lot of respect and personally I have found it to be a profoundly fulfilling profession on many levels, as a contributor to society, a business leader in the community, providing employment, an educator and as a provider of a legacy for my family. Property Development for me is at the very exciting “pointy end” of entrepreneurship.
The Property Developer is a visionary who creates and orchestrates the processes and consultants to make his/her vision a reality. If ten developers looked at the one Site, they will come up with ten different solutions as to what they would put on the Site. While there is no right or wrong answer, except of course if they propose something that cannot be approved by Council, each of the solutions will have a different outcome and importantly profit margin.
The best developer strives to achieve the highest and best use for a site. Often, the most successful developer is the one that sees opportunity that no one else can, and will therefore achieve a better outcome than anybody else.