First Time Property Investors

Knocking down and developing Do it on your own or get help from an expert?

Many investors start off by finding a nice block of land with a rundown house on it and knock it down to build two maisonettes or similar thinking that if everything goes right, in 12 months it will provide them with a quick buck and they are on their way to becoming another Donald Trump.

Hmmmm, good luck with that!!

Builders out there are promoting their quick build times suggesting that it will take only 26 weeks and in most cases that is the average time to build a home however it’s what comes before the start of construction that can take just as much time if not longer if you go it on your own for the first time.

You may also find that the block of land that you have just bought is actually not suitable at all once you meet with council and find out their requirements or sometimes their weird idiosyncrasies.

I know of a couple that did just that and didn’t want to spend the additional money to hire an expert to guide them through the journey. Unfortunately they found out the hard way that it’s not as easy as it may seem.

They decided to enlist the services of a friend in the demolition business to get started and knock down the existing home without getting the approval from council first.

Naively they thought it was their home to knock down and why would you need permission for that. That was three years ago now and nothing has happened on that block since. This was due to the fact that the home had a heritage listing on the front of the building and under no circumstances were they allowed to knock that part down which unfortunately they did.

They are currently in court and fighting an uphill battle that is only going to end in tears. This mistake will unfortunately cost them thousands of dollars and a lot of heartache.

Other more common issues that are faced by first time developers are the restrictions that maybe imposed on building two storey homes and the sometimes very protective councils with their take on a particular street or part of a suburb.

I have friends that bought a large corner block of land in the eastern suburbs and had grand plans to build a beautiful two storey home. They went through the process looking forward to their new family home and were rudely shocked when they were told that the council didn’t want them to build a two storey home in that street. Actual I lie, they didn’t want them to build a two storey home in that part of the street. To their horror the street that they had bought the land on which was around one and a half kilometres long had a section of it that was 400 metre long which the council had the problem with even though on either side of this section there were many other two storey homes.

I live one street over from these friends in a two storey home with views of their property and could throw a stone onto their property and in my street there are no such restrictions.

Sounds weird, well it happens and unfortunately my friends have already spent tens of thousands of dollars fighting the restrictions and eventually they had to circum to the councils requirements.

Now imagine if one of the above stories had been yours and this was your first investment property experience.

The chances are, it would have been your first and your last.

If you or your friends are looking to start off in any type of development make sure you have done your homework or talk to us about how we can help.

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