how to find development sites

Have you wondered how to find development sites? The right site is the difference between a successful property development and a fizzer.

And it’s not easy to find a suitable site. There are many factors to consider, and not all of them are beneficial. 

Some sites might seem perfect, but if you dig a bit deeper and do your due diligence, they are in fact have great potential to be a massive headache. And other sites might not seem suitable at first but are perfect. 

I’ve been a twonhouse developer for almost 10 years and in that time, I’ve come across so many different sites that I’ve lost count.

However, I’ve developed a keen eye and nose for a suitable site in my time. And in this article, I’m happy to share twelve tips from my expert perspective. 

Read on if you want to know what an expert property developer looks for in a suitable site. Because I’m ready and happy to share my tips with our readers. Let’s get into it.

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Know Your Zoning

residential development overlays

Our first tip is about residential zoning. Zoning is how the local government authority (the council) categorises land for use. For instance, an area of land where there are lots of houses is zoned for residential. A block of shops is zoned commercial. 

There are some instances of mixed zonings, such as a mixed commercial and industrial development. Or a dwelling above a shop.

However, for your purposes as a property developer, you need to develop in a residential zone. There’s no point in buying property in a commercially zoned area to attempt to build townhouses or to build a dual occupancy. Your application won’t make it through.

Trees – Watch Out

be aware of trees

Let’s get into the first tip of how to find development sites. 

You probably wouldn’t have thought anything about trees on a development site until I’d mentioned it. After all, most homes have a tree or two in their yard. However, there are several factors you need to consider when evaluating a site for development if trees are present.

Local vegetation overlays, requirements, and regulations may impede development. And delays are costly in this game. Every day has a dollar value attached, and a delay can double that dollar value.

This tip will also give you an edge over other developers who might consider the same sites you are.

They might dismiss a site that has a large tree in an annoying location, whereas you might be willing to remove it to develop the site. So, don’t discount sites based on vegetation, but be prepared. Forewarned is forearmed, after all. 

Side note – think about car parking and car turning circles, these can be important and can catch you out if you aren’t thinking about them.

How to Find Development Sites – Site Dimensions

finding development sites

The block dimensions of a potential development site are integral to the development process. I mean frontage and depth, or length by the block’s width. 

These measurements will significantly affect what you can build on the block. They might even mean the difference between a profitable development and one that costs you money.

For instance, the block dimensions will determine if you can build two, three or even four townhouses on it. This will inform the whole direction and strategy of your project.

It’s worth doing some research about block dimensions and potential developments. Knowledge is power, but it’s also money.

Be Aware of Encumbrances

Let’s learn more about how to find development sites. 

We’ve already mentioned one potential encumbrance – trees. However, many more can directly impact your project’s feasibility and potential.

Examples of encumbrances include easements, power poles, sewer access and telecommunications pits and cables.

In some cases, they may completely halt a development.

This is why you need to do your due diligence when investigating a site. If you miss a major encumbrance, it will cost you time and money. 

While it’s stinging you, you then need to figure out how to get around it. This means compromising on your vision and can impact your bottom line. 

Put some time towards learning the different types of encumbrances in your local area. 

How to Find Development Sites – Overlays

residential development overlays

Here is another expert tip. An overlay is a map in a local council town planning scheme that displays the extent and location of certain features. 

For instance, it might show where land might flood. They have an integral role in any residential development process as new buildings can impact overlays in specific ways.

As a residential property developer, you need to understand the importance of overlays and consider them when planning a project.

Luckily, this information is available online. I use a helpful site called Land Checker, which is a paid subscription. Sometimes you have to spend money to make money

If you’re fair dinkum about this career path, then you need to accept the fact that there are some costs of doing business.

Connecting Services

connecting development services

When choosing a site, you need to factor in the location of the essential street side services. You’ll also need to know how to connect them and the associated costs. This is essential when figuring out how to find development sites. 

This is your power, NBN, water, sewerage, and gas. If your potential site is in a tricky location, you could be looking at over ten thousand or more just to get the site connected.

If this is the case, you need to factor this into your total costs and feasibilities. This can be a significant financial blow in some cases, and the cost will come off your profit. In this game, you want to protect your profit at all costs.

So, factor service connection into your planning.

Site Orientation

site orientation

The direction your site faces will play a big part in the process. I’ve seen novice property developers get stung here, where they haven’t factored the site orientation in and have lost big time.

You need to give this suitable planning and thought.

Site orientation is a massive factor, and townhouse buyers are becoming savvier. For instance, let’s say your design has a south-facing open-plan living space. This means that most of the day is spent in shadow. People like sunlight filtering into their homes, understandably. No one wants to live in the shadows every day. 

So, learn to understand site orientation and its impacts on your townhouse designs.

Network and Get (and Stay) Connected

The old saying goes, “if you’re not networking, you’re not working”. It’s worth building up a solid network of real estate and property development consultants. These can often be mutually beneficial. 

make money as a property developer

By doing this, you are helping yourself out. You never know when you may need to call in a favour that will significantly benefit you. And vice versa, doing a favour for someone can put you in a great position.

For instance, if you get to know enough real estate sales agents, you may find you can gain access to off-market properties that are ripe for development. You might be able to snag a great site without going to an auction. Avoiding competition for sites is always a bonus.

Know the Local Infrastructure

local infrastructure

When narrowing your search on how to find development sites in a specific area, it’s time to research the local infrastructure and amenities.

You want to look for things like the availability of public transport options, the location of childcare, kinders and schools, and even the shops. Also, look for public spaces such as parks, playgrounds, and dog parks.

People looking to buy or rent property in an area will consider the local amenities and infrastructure. 

For example, you might find what you think is a perfect site, for good money, in an outer suburb. But when you investigate, there are no train stations or bus stops nearby, the shops are a fair drive away, and there are no schools nearby. Families will consider this when looking for housing. 

Compare this to a more expensive site but in a suburb with a wealth of local amenities and infrastructure. You might pay more, but the homes you develop will be more desirable for buyers.

Know the Market

Part of identifying great sites is knowing the market and knowing it intimately. As a budding townhouse property developer, you should be across all things real estate. Buying, selling, leasing, and developing.

Make the real estate listing sites your stomping ground. Browse sales listings, sold history, and other data. Learn what suburbs are booming and what ones are slowing down. If you notice a dip in the market, it might be a good time to snap up a site.

Knowing the market will give you an edge over the competition – who are other property developers but also investment property purchasers and owner-occupiers. 
Let’s get to the next tip about how to find development sites. 

Patience, Discipline and Detachment

how to get into property development young

These are values and habits that are incredibly important to foster. You need to have expert-level patience, discipline, and detachment. 

Patience because real estate and development stuff take time. Waiting for settlement, waiting for permits, waiting for townhouse builders. There is a lot of waiting in this game. If you get impatient, you can become rash and make rushed decisions. Rushed decisions can equal lost profit. Keep a level head and remain patient. 

The discipline and detachment also come into it when finding sites for development. If you get emotional and attached to a site, you are not thinking straight.

I’ve seen this before. A property developer gets emotional and invested in a particular site, thinking it is perfect. In doing so, they fail to do their due diligence. Then they get the site, and the problems start, and before they know it, they’re out of pocket or facing massive delays.

Detachment, a cool head and remaining calm and collected are all game-changers here.

Occupancy Rates and Vacancy Levels

vacancy levels

Let’s keep reading about how to find development sites. 

Furthermore, you need to study your chosen area’s occupancy and vacancy levels. This is where your networks and your online databases come into play.

The reason for this is that you are never sure if an investor or an owner-occupier(s) will purchase your developed townhouses. You will never know until the sale is in process.

If investors are interested in your properties, they will consider the area’s vacancy rate. No one wants an unoccupied investment property they need to pay a mortgage on without any income from the dwelling.

Some areas can have a high vacancy rate despite rising property values. They are not always correlated. So, be across this factor. 

In Summary

little fish developments

We’ve shared twelve tips from an expert property developer in this article. These are the factors that I consider when I am researching and investigating potential development sites. I never let them leave the forefront of my mind.

I am always a step ahead and approach the site from different angles and perspectives.

I’m happy to share these tips with you, as I believe in educating and informing the next generation of townhouse developers

If this seems too much, remember that here at Little Fish we offer a boutique property development management service. We can manage a project for you, end to end.

We manage every step of the way from site identification through the turnkey off the plan sales. Get in touch if you want to know more. If you plan to go it alone, check out these secretes to negotiating the purchase of your site with a real estate agent.