Key principles that apply no matter the conditions.
We all know that home values across Australia are in decline. That decline now is beginning to soften. Banks are reluctant to lend, our political landscape is uncertain and sellers are holding off listing until the economic storm clouds pass.
But after two decades in the property industry during which I have bought, developed and sold more than $110 million worth of bricks and mortar, I want to show you how to build significant wealth regardless of where the property market is at.
There are key principles that apply no matter what the conditions. By applying these golden rules I want to help people like you make more money from real estate than ever before.
Rule 1 – Research
A property investor or developer can never know too much – Information, knowledge and a reliable team are keys to success.
Research and networking is the only way you can know all there is to know about the property market you are considering investing in.
Investors need to undertake research on every aspect of the market so that correct allowances can be made.
There is also thorough research needing to be done on the property itself so there are no costly post-investment surprises or unexpected set-backs to your success.
Thorough research means you can invest wisely, that you are investing in the right places, at the right time and for the best possible return on investment.
It is simple to get hold of data on auction clearance rates, the property itself, vacancy rates, sales volumes, rental yields and local demographics.
The information is there. Do the work and get your hands on it.
Rule 2 – Create a Network
Your network is the architecture of your business. It should be built around people who are reliable and who you can trust so that every aspect of your development is cohesive.
Without trustworthy and reliable people you will quickly find you are learning simple things the hard way.
I’m open about the mistakes I’ve made and learned from in the past – just ask, always here to chat!
Rule 3 – Check the Numbers
Whether investing or developing, the numbers you crunch are crucial to a healthy profit.
You need to have complete insight into the market – where it has been and where it is now. This is preparation for the future.
There are three fundamentals to checking the numbers that have come from your research;
- Overestimate the costs
- Underestimate the end value, and
- Allow for contingencies
Intelligent feasibility needs to make complete sense. Developers often fail due to what I call “feasibility optimism”.
Rule 4 – Flexibility
Build flexibility into your development or investment plans at the beginning of your process and have a Plan B in case things don’t move forward as expected.
If things change, is there another option that can still be profitable and deliver a substantial return on investment?
Ensuring your project still goes ahead and makes money, even if it wasn’t your original vision, is what intelligent investors do.
Rule 5 – Profit
Profit is why you invest or develop – make sure you follow the rules to maximise your bottom line.
The real profit is made when you purchase your property. Time equals money in every aspect of property development game. For example, negotiate a long settlement on your purchase so you can use the time for planning. This can save you big dollars!
Rule 6 – Align Yourself with Professionals
A reliable and trustworthy network lets you do what you do better.
But aligning yourself with professionals means getting the job done in the smoothest and most profitable way.
To get top results, you need to have a team of the best real estate agents, town planners, drafts-people, engineers, architects, solicitors and lenders.
Rule 7 – Patience
A profitable development or investment requires patience from start to finish.
Be patient and buy at the right time, for the right price and under the right terms.
You are unlikely to secure finance or town planning approvals as quickly as you would like.
Be prepared for when construction or renovations don’t run smoothly.
Having a cool head and patience when things don’t go to plan allows you to make the best decisions.
Our decades of experience mean we know how to partner and maximise investment returns. Keen to know more?
After reading my 7 rules you want to take the next step, contact us for a strategy session – Let’s chat!
Thanks for keeping up to date on What’s Happening – speak soon!