The Different Players in Residential Property Development
It takes a decent sized team to develop real estate successfully. There are several different players in the space, all unique and with their own roles to play.
From development consultants to real estate agents, you’ll likely need to engage various professionals to complete a project.
And like any significant project, you need a great project manager to keep everyone on task. And on time. Every single day in a development project has a dollar value attached.
Delays cost money.
That’s why it’s essential to know who all the major players are. Then, once you know, you’re halfway to doing your own development.
Also in this helpful article, we will explain who the different players in residential property development are.
Like everything, this can vary, so not all of these roles will play a part in every single project. For instance, you may go with an independent builder over a large company.
But at any rate, you’ll walk away from this article with a better understanding. Ready? Let’s go!
Volume Builders
Volume builders are larger building companies that do a high volume of builds. They have many projects on the go at one all over the country.
These are companies like Metricon and Porter Davis.
They can build a dual occupancy development for you, but you won’t get a close, personal touch with them. They are capable and efficient, but the downside is they often won’t do a custom build.
Independent Builders
These are your smaller, boutique builders. They are often a one or two-person show, with subbies taking on the rest of the work.
The advantages of an independent builder are they can usually do a custom, unique build. In addition, they have the flexibility to do this when compared to the more prominent builders.
In addition, their work is often exceptional as well, as they usually only do one project at a time. This gives them ample time to pay close attention to detail.
Boutique Development Firms
Next up are your boutique development firms. These are usually small to mid-sized businesses that solely do residential development.
Some of these firms will project manage a development for you. You begin with the land and the working capital, and they look after the project for a fee.
The bonus with these firms is that they are customer-focused, as their revenue comes from investors and high net worth individuals looking to maximise the value of their land.
This means they are friendly, approachable and committed to customer success.
However, If the project doesn’t get done, they usually don’t get paid. You can see the benefits.
Conveyancers and Lawyers
We’ve put these two together as these professions look after the legal side of things and the documents related to purchasing and selling real estate.
A lawyer can do conveyancing, amongst other legal tasks.
While a conveyancer just focuses on conveyancing.
They will look after both the purchase of the land to develop and the sales of the finished properties. They manage the deeds, titles and other documents.
While you can do the paperwork yourself, it is a significant headache. However, it is worth the cost of these professionals. Also, a mistake could cost you big bucks. So play it safe and use these people.
Surveyors
A surveyor is a professional who establishes the boundaries of your land, amongst other measurements of your block.
They will do the crucial surveys. You cannot subdivide and sell developed properties without these.
These surveys are called a features and levels survey and a re-establishment survey.
A good surveyor is worth their weight in gold in this game.
The Next Player – Architect
Without an architect, you cannot build a home. It is their job to design, draw and make plans for your development.
Now, you may think that this is all that they do. But that’s just not true.
You’ll want to involve the architect from the get-go on your project.
They can assist with site selection, your feasibility studies, the design and planning of the properties and managing a budget.
In addition, they can also help you select the project team, as they have their professional networks.
An architect will also have a hand in the interior design and the landscape design for your yards.
Finances – The Lender
Unless you have enough upfront capital to bankroll an entire development project, you’ll likely need to finance the construction.
This means loaning money from a lender. A lender can be one of the big banks, a smaller bank or even a private lender.
Each has its pros and cons.
The main tip here is that you will need finance, and you cannot obtain finance for soft costs, such as the fees of the professionals we mention in this blog.
Development finance is typically for hard costs only – your construction and associated labour costs.
Town Planner
Here is another key player.
Your town planner works on your behalf to work on your development plans, including plans of subdivision.
It’s their job to get your local government/council to approve the plans so you can forge ahead with the build.
Without an approved plan of subdivision, you cannot sell your properties off the plan, so without a town planner, your project is dead in the water.
A good town planner can work on anything from a simple dual occupancy development project or massive, mixed-use tower projects.
Real Estate Sales Agents
The next and final player we’ll talk about is your real estate sales agent.
This is the person who will look after the sales of your properties.
You can either sell off the plan or put them on the market.
Off the plan has advantages, the main one being you will see settlement sooner. Within 14 days, in fact.
The sales agent will market, promote and sell your properties. They are salespeople, first and foremost. So let them do their jobs, and their commission will be more than worth it.
Conclusion
By now, you’re an expert in who the major players are in residential property development. You’ll need this whole team working for you to get a project across the line. Good luck in your development endeavours.
AUTHOR BIO
Author: Peter KellyPeter is a co-founder at Little Fish Property Developments, where he the senior development project manager. Peter Kelly is enthusiastic about real estate with 10+ year’s experience as a residential property developer in Melbourne, Australia.
