Property Development Due Diligence Checklist: How to Assess a Site

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Are you planning a property development project and need a property development due diligence checklist to assess potential property development sites? For many people learning how to start as a property developer, this is one of the most important skills to get right before committing to a site.

If you want expert help assessing a site before you commit, our property development due diligence service can help identify the risks, numbers and development potential before you move forward.

Well, stick around because, in this article, I will share all the factors that I consider when determining the viability of a potential development site to undertake a dual occupancy design, working with experienced dual occupancy builders can help optimise your project’s success.

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You’ve heard me say this many times.

Property development is a high-stakes game, it’s high risk, but with the right due diligence, it can lead to high reward.

Possibly the most significant risk of all is purchasing a site to find out that you can do what you were planning to with it.

Conducting thorough due diligence and a detailed development site analysis is the critical first step when assessing a site.

It’s about getting ready for your development.

For newer developers, starting with practical property development courses can help build the confidence and know-how required to make smarter site assessments early on.

If you get it wrong, it can have grave consequences, so you need to know what you are doing to have the confidence you need to ensure your decision is the right one.

Property Development Due Diligence: Planning Zones and Market Analysis

As part of property development due diligence, I first check the planning zone and any planning overlays affecting the property

I then look at the suburb’s medium house price, and how that compare to what I want to sell my completed townhouses for.

Ultimately it needs to make sense. Ideally, you want to be close to the medium house price because you want the buyers searching your selected suburb to be able to afford your townhouses.

If you are needed to break a suburb record or sell significantly above the suburb’s median house price, you are appealing to a tiny part of the market.

It’s not what you want to do if you have a choice. Ideally, you want to appeal to the fat side of the market, which is going to be around that median house price.

Block Dimensions and Site Orientation

Next, I look at the blocks dimensions, does it work as a development site? 2? 3? 4? Side by side, front to back? Is it a dual occupancy corner block?

If you’re considering replacing an existing structure, it’s important to understand knock down rebuild costs and how they impact your feasibility calculations.

From there, I am thinking about what the size of each townhouse will be.

The difference between 2-3-4 bedrooms makes a big difference to the sites development feasibility.

After the dimensions I look at the site orientation, which way is the site facing and how is that going to affect what I am looking to build, are there any townhouse development overshadowing concerns.

I look at what else is getting developed in the area. Is the council encouraging this kind of property development?

Property Development Due Diligence Checklist

Whether you’re a first-time developer or an experienced investor, following a structured due diligence checklist ensures you cover all essential aspects before purchasing a development site:

1. Planning Zones & Overlays: Confirm local zoning laws and any restrictions.
2. Market Analysis: Compare median house prices and feasibility.
3. Site Feasibility: Assess block dimensions, orientation, and access.
4. Legal & Financial Due Diligence: Review property title, easements, and financing.
5. Comparable Sales: Analyse recent sales of similar properties in the area.
6. Development Approval Potential: Seek early feedback from town planners and architects.

Once I tick the relevant boxes up until this point, I then start to ask myself a whole host of questions:

All the Questions I Ask Myself

• What do the setbacks look like?
• What’s the frontage like?
• Do I need another crossover?
• If so, are there any obstacles?
• What’s the street like?
• Is it a busy road? A tree-lined? Is it wide?
• Does it have big nature strips?
• Is there a slop on the block, if so, how will that affect what I want to build?
• Are there any significant trees that may be an issue?
• Are there good amenities close? Schools, parks, train, shops, cafes etc.

Find Comparable Sales

If all of these tick the right boxes I then start to look at comparable sales in the area relative to the product I’m looking to build.

I’m also looking to see if I can find any sales history on the property to understand potential future property values. Has it recently been sold, is there a story/reason?

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The more information I can find on the property, the better.

The Final Check

Once I have done all of this if I haven’t put it on the scrap heap, then I move to my final check.

If you’re unsure about certain aspects of your site, consulting a property development consultant can help you avoid costly mistakes and ensure you’re making informed decisions.

I also send the site to my draftsman/architect and town planner for some feedback.

I may be the real estate developer but the more set of eyes you can get over it, the better.

If the feedback from these guys is positive, I then move into the numbers.

Remember, the property development due diligence stage is about determining whether a site can be developed.

But just because it can be developed does not mean it should be. The next step is a detailed development feasibility, where you test whether the purchase price, planning costs, build costs, holding costs and likely sales revenue produce an acceptable return.

A property development feasibility calculator can help you run those numbers consistently and determine whether the project genuinely stacks up before you commit.

By running this process periodically and consistently you’ll begin to become a local real estate expert.

Join the Little Fish Network: our free property developer network, , to connect with like-minded developers, access exclusive tools, and get heaps of value, including a comprehensive due diligence checklist and expert property development guidelines to help you make smarter development decisions.

Wrapping Up

Need expert guidance on your property development due diligence?

Working with a development project manager can streamline the process and help ensure your project stays on track from feasibility to completion. Book a FREE strategy call today!

Thinking about a dual occupancy development in Brighton East? Check this article out.

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