Property Developers South East Melbourne: How They Make Their Money

Are you wondering how property developers in South East Melbourne make their money?

In years past, the primary way that people generated passive income from real estate was by building a property portfolio of private rental homes.

This is still valid, but an average rental in most suburbs will gross you between $27-30,00 a year, give or take.

And that’s before property manager fees, rates, general upkeep and maintenance and any emergency repairs.

Landowner insurance might cover that, but that’s another added expense.

By doing a dual occupancy project on a suitable site, savvy property developers can gross much more all in one go.

Sure, a project takes time and some upfront capital, but it is an investment venture that can pay some serious dividends. So if you are asking yourself is property development profitable, for many developers in South East Melbourne, it absolutely is.

Why South East Melbourne?

South East Melbourne includes suburbs like St Kilda, St Kilda East, Windsor, Ripponlea, Caulfield, Prahran and Balaclava.

These are highly desirable and some of the best suburbs for dual occupancy projects, offering a range of local amenities.

The beach is nearby, as is Luna Park, bustling shopping strips, plenty of great eateries, cafes and bars.

And if nightclubbing if your thing, Chapel St is the place to be.

This makes this part of town a perfect location for property developers in South East Melbourne.

There is some serious money to be made if you understand the property development process and have the right experience.

And if you don’t, you can still make some money by partnering with a development project management company that can do the heavy lifting for you.

But we’ll talk about that more later.

For now, we will share an example of a development in South East Melbourne that is set to generate a tidy profit. In suburbs like Balaclava, the numbers show there’s real potential to make a million dollars from one property development when the site, design, and execution all line up.

Full disclosure here – it’s a development that we are doing at Little Fish.

We do this day in, day out. But it’s a great example, so we thought we’d share it.

Dual occupancies are one of the most popular small-scale development types in Melbourne, offering a way to unlock the full value of a block by building and selling (or retaining) two separate dwellings.

One Becomes Two: A Dual Occupancy in Progress

We are currently seeking approval to construct two three-bedroom, three-bathroom townhomes in Balaclava.

Each will have garages garage and offer approximately 24 square meters of living space.

These properties will feature premium design and all the bells and whistles.

The original dilapidated house and land were purchased for $1, 475, 000.

Now, each of these properties, based on the current market, will sell for around $1.5-1.6 million. So, let’s call it total sales of 3.1 million.

If you subtract the 1.475 from the 3.1, that leaves approx. 1.625 million to complete the development.

Pretty quickly, you can see that there is more than enough meat on the bone to pay all the relevant hard and soft development costs, including the construction and be left with a tidy profit.

Timeframes

Now, like other investments, property development isn’t an overnight, get rich quick venture.

There is often a year, sometimes two spent on a project before completion and off the plan sales are settled.

Sometimes delays occur, because of different factors, and there are always development risks associated as well.

The key is that you have contingencies for these delays and risk mitigation strategies before you embark on a project.

This is why we mention you need to know your systems, processes and have a bulletproof plan and watertight development feasibility reports.

In this game knowledge is power, but it’s also money.

Armed with knowledge, you can generate serious profit.

This is also the foundation of how to make money from property development more broadly, applying proven systems, feasibility discipline. And execution frameworks that work across different suburbs and market cycles.

This is a lot of work and is a high-risk, high-rewards game. But with careful planning, forethought and knowledge, the rewards are there to be had.

And they are significant.

Not Confident? Engage a Project Management Company

Now if you’re reading this and own land in South East Melbourne, you might want to try your hand at a project.

Or, you may not have land, but you might have some equity to access or some working capital.

Either way, if you want to attempt this form of investment, at Little Fish, we can assist you in getting started in the property development game.

We are dual occupancy specialists. We offer property development management services for these types of projects all day, every day, all over Melbourne. Here is some information around developing in Brightn East.

Our team are dedicated, hard-working, experienced, and capable, and we know our systems inside and out.

We also have our working network of other property professionals, including sales agents, town planning specialists, townhome builders, conveyancers and more.

When you work with us, our network works for you.

So if you’re considering giving this a red-hot go but lacking confidence and knowledge, that’s where we come in.

We are expert property development consultants and manage the whole project for you while you stay as plugged in as you want. For some people, this is la lot; others are more casual about it. That’s entirely up to you.

Or simply join the Little Fish Network for free. Being part of a strong property developer network allows you to leverage these connections, stay ahead of market trends, with exclusive opportunities that aren’t available to the public.

Whatever you want, we’ll work with you and for you.

You can also monitor your project via our dedicated online project portal, and we’ll keep you as informed as you want to be.

Get in Touch

If you’re keen to know more about becoming property developers in South East Melbourne, call us. You can book a call with our expert team anytime.

If you have land, we can make it work for you. If you don’t, we can identify a suitable lot and assist you with the dual occupancy house designs to develop it successfully. We partner with some of the best home builders in Melbourne to ensure your project gets delivered to the highest standard on time and on budget.

We’d love to chat, so get in touch soon.

Happy developing!

Filled under: All Developer Insights