Property investing can be an excellent way to grow your wealth. Property development can also be used as a further way to generate additional value and returns from your investing.
Property development generally requires a higher level of skill, and those wanting to explore it should consider the different types of property development options available - each option will involve different levels of risk and expertise.
Ron Forlee's book Australian Residential Property Development is an excellent resource for residential property investors, and summarises different types of property development, and their unique characteristics - see below.
RENOVATIONS
Risk Level - Low
Financing - Very good
Expertise - Low
Saleability - Good
SINGLE HOME BUILDS
Risk Level - Low
Financing - Very good
Expertise - Low
Saleability - Good
UNIT BUILDS
Risk Level - Low
Financing - Good
Experience - Medium
Saleability - Good
APARTMENT BUILDS
Risk Level - Medium
Financing - Average/Good
Expertise - Medium/High
Saleability - Average/Good
LAND PURCHASES/RE-USE
Risk Level - Medium/High
Financing - Average/Difficult
Expertise - Medium/High
Saleability - Depends on Use
ACCOMMODATION
Risk Level - Medium/High
Financing - Average/Difficult
Expertise - High
Saleability - Good/Average
Based on the summary above, renovations (e.g. upgrading a kitchen/bathroom) and single home builds are great options for getting starting with property development.
Make sure you research hard, talk to developers who have already done it, and understand local planning laws before you embark on any type of property development.
