Have you ever been interested in property development and wondered the true potential of your existing property? You may have seen an older home demolished in your street and four new townhouses pop-up and wondered about the profit the developer made in the process. You may have even considered looking into running a development project of your own but not had the capital, time to commit or knowledge and skills to execute? If this scenario sounds familiar to your circumstances the good news is, you can develop your own property without being a Property Developer, through the use of a Joint Venture agreement with a Property Developer who is focused on a win/win outcome for both parties.
In today's current property market here in Australia, if you sell in today's 'hot market', you will also buy in today's 'hot market', meaning you are likely to over-pay on the new home and use up a solid % of your profit return purchasing again. Add to that the commission paid to the sales agent, stamp duty / purchase costs and the overall hassle that comes with moving and this is enough to deter many owners from the thought. Many owners also do not want to give up their family home as it's where they raised their families, they have a deep sentimental and emotional attachment to the home and are simply not interested in the stress that comes with relocating.
Depending on the lot size/shape, zoning and existing dwelling layout of your existing property, you may be able to retain your existing house and develop a new lot (or multiple lots) without having to demolish the existing home or even move out during the process. This is one of the first checks we conduct to confirm options for each potential project. This is a great strategy for many as the family home can be retained, and you are converting existing land into a profitable product. Depending on the condition and quality of the existing home, in many cases it's "new value" on the smaller lot post-development is highly comparable to the previous value on the larger lot - the key is unlocking the value in the land. The profit earnt subdividing can then be used to inject cash into your retirement planning, fund a new investment, pay down your existing mortgage or simply to keep in an emergency fund for the future.
The first step is to understand the site options, constraints and issues and work out the most workable and profitable solution that meets your needs. A detailed feasibility and scenario analysis is undertaken to show with high certainty expected value to be achieved through the development process. This is where a trusted relationship and partnership with a Developer focused on mutual benefit and win/win focus is invaluable and can lead to a better outcome than simply selling your property on the market.
That is why at Langton Developments we offer a multitude of options. Whilst traditional site acquisition is part of our strategy, we are also interested in partnering with owners to complete joint venture development projects. Under such a project, we bring the skills and the funds to cover all development costs and agree to a profit share model with the owner. Everything is drawn up accordingly and agreed through a legal contract. The owner brings the land to the deal, but apart from providing formal written permission to complete the development, is not required to contribute anything further. We are fully transparent with our feasability, stepping the owner through all the numbers and our process to ensure they are comfortable and well informed throughout the entire project.
If this sounds like something you might be interested in, or you simply would like to know more and how it may relate to your own situation, please don't hesitate to reach out to us for a no-obligation discussion. We would be very keen to hear from you and discuss a number of options and how we may be able to work together in the future.
Chris & Jon
Langton Developments Pty Ltd
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