Well, stick around because, in this article, I will explain why getting into property development with a friend can be a great idea.
Let’s get into it.
Partnering with a friend on your property development is a great way to get your foot in the door and minimise the risk.
Particularly if you cannot move forward with confidence on your own.
Here are five reasons to consider partnering with a friend on your next property development project.
1. Partner from Outset
It will always be best to partner from the very beginning. If you buy the property together from the outset, develop it together, and then own one each, this is the only way to get maximum benefit.
The key is to purchase the property together to avoid additional stamp duty.
So, get organised, and find your friend because it is a good idea to undertake the development together right from the outset.
2. Partition Agreements
Your solicitor would organise a partition agreement. Technically speaking, it is essentially a division of concurrent interests in land.
It’s a way in the past here at little fish that we’ve been able to get clients to end up with a property each at the subdivision stage without incurring any stamp duty.
In essence, it’s an agreement put in place from the outset where both parties are documented on the original purchase and have agreed to develop the property and end up with one dwelling each.
Ultimately incurring no extra stamp duty.
As always, be sure to seek legal advice on these things. I’m just sharing my experience – always talk to the relevant professional consultants.
3. Design Your Half
It’s an exciting part, where you get to put your touch on things, select your colour palette and your materials, and work on your own floor plan.
We’ve found that clients really appreciate this freedom and flexibility – particularly being able to impact the overall design and floor plan layout and function independently.
4. Minimise Risk
Teaming up with another party is a great way to get your foot in the door without assuming all the risk yourself.
It will also give you more serviceability through the different entities and, most likely, more capital to work with.
Property development is a high-stakes game. And it can be a significant financial commitment to get a project off the ground.
5. Rinse and Repeat
We work with many friends, families etc., that partner up, and we at Little Fish have witnessed first-hand how beneficial this can be for inexperienced developers.
I can assure you that there is no fun in living on the bread line because you’ve overcommitted to a project. Nothing worse!
As you start knocking over the projects, we’ve seen our clients move into suburbs they may never have been able to, so it’s a great way to build your capital.
I hope you got some value out of these property development ideas – until next time. Happy developing!!!