Developing is a fun and amazing way of life. FACT.
Well, that is what we at BuildHer Collective believe!
Being able to make a home that someone will love and cherish is an amazing gift, but also so much fun! The truth is that we hear from so many women who want this lifestyle too. They are not too sure what it means, entails and most importantly the dreaded question – Will I make a profit?
In honesty, this question will plague you until the VERY END. Not until the very last dollar is accounted for and the sale settled will you realise this. And well, that is a bit scary, isn’t it?
When we sit down with our DevelopHers in our Strategy Sessions we get to answer some really common questions. These can cover a range of things because Developing is so personal. How you do it, structure it, what tasks you take on or hire someone to do will affect the profitability and how much profit you are aiming for is hugely personal too.
Here are so of the most common questions we get asked from those on the development pathway.
- How much will my reno cost?
- What percentage profit should I aim for?
- How do you get finance?
- How do you manage the cashflow – development and personal?
- Who should I hire an Architect or Drafty?
- What is the best location to Develop in?
And do you want to know what we always ask back? Can we see your Feaso?!
All too often people rush into developments without understating the risk factors and having these answers to above questions. Now, sometimes that just works out fine and other times they get burnt.
People love buying properties and putting their personal touch on them, creating a home and a place to make memories. We have two types to DevelopHers that we work with, those looking to create a business and a reliable income through working for themselves, building a flexible lifestyle for themselves and family and the other who have a part time job and what to supplement their income with a Development on the side or renovate their own home with resale potential in mind.
Working within a proper framework in either scenario is so super important to guide your decision making and get you making the best decisions for you, your persona circumstances, personality, and risk appetite. That is why we created the BuildHer Collective Development Plan so that we can help people avoid these costly mistakes.
So here are our top ten tips for making sure your next renovation does make a profit
1. Do a feasibility.
A good Feasibility will act like a guiding start for you and your development – it will set the expected budget and parameters that you need to work within. Make sure you account for all the costs – Construction, Holdings, Consultant fees and Permits, Authority Fees, Finance costs & sale costs!
2. Build in a Contingency
Kribashini will never get tired of reminding you about this! Contingency, Contingency, Contingency – even the best planned projects will have unexpected costs – you need to allow for this.
3. Build the right team around you
Your development team can save you thousands or cost you thousands with a simple mistake. If your margins are too tight this can kill the profitably of your project. You team can consist of a Buyers Advocate, Broker, Accountant, Lawyer, Designers, Engineers, Town Planner, Real Estate Agent, Stylists, Photographers, and others.
4. Get good advice early on – before you buy
Be ready to pay for good advice, this might mean having a sinking fund that you can use to seek advice or obtain reports prior to purchase if necessary.
5. Understand your market and what they value
Including key amenities and understanding what your buyers needs in their home is paramount – is it 4 bedrooms or 3? Do you need to have a double garage or not? All too often we included what we would want but this is not always correct.
6. Know who you buyer is and design with them in mind
With so many sale records Rebeka knows a thing or two about getting the right look and feel of a home – make sure that you are building the right product for the market you are in,
7. Select the right “Build” plan for your development
With so many ways to deliver the building works getting the right method for you and what has been costed in your Feasibility is critical. You can Owner Build, hire a bespoke builder, pick a volume builder, or build modular. So many options with different price points.
8. Shop around when appropriate
There is so much cost variance in the building Industry – for the right budget amounts you should shop around – we recently went out to four Stonemasons on the Rathmines project and the price difference was huge -it is these small amounts of $10K here, $5K there – that blow the contingency along the way.
9. Learn about the process so you do not get stuck
Town Planning – shudder. Most people get so frustrated with the process because they are learning about it as they are doing – this can add loads of time and cost to your project – understand what your local Council wants in the area you buy asap.
10. Be flexible
Arguably our best piece of advice. People think that we have a magic formula and that things are easy for us because we have all the contacts and know what to do – the truth is those things do help but, and this is a big BUT, we get caught out. We get let down, we have to adapt and change our plans all the time. How do we handle it? We keep a flexible positive mindset when it comes to developing.
As always there so much to say on this topic. With ever-changing trends and increasing buyer expectations, hitting the mark on the right design and finish is so important now more than ever.
If you want to talk to us more about Developing or Renovating to make a profit for a lifestyle or just to be smart about your home investment – book in a call Here. We want to help!