In this article, I’m going to share 6 things that I wish I knew before I undertook my first townhouse development project here in Melbourne.
If you are new to the game, then the learning curve is steep. That is for sure.
My goal is to fast track your knowledge by sharing some of the most valuable lessons that I’ve learnt over many projects.
Before we get into it I want to point out the importance of understanding townhouse designs and prices – so the costs involved. For now, let’s move on.
1. Using Builder Square Meters Rates as a Metric
The first thing I want to talk about is duplex builder square meter rates.
While these square meter rates can be handy to lean on in specific scenarios. They can be seriously unreliable and have the potential to give you a bum steer.
The issue is that they become somewhat distorted depending on the project’s size.
When you have two projects with the same number of bedrooms and bathrooms, yet they are significantly different in size, this is when it can become problematic.
If you think about it, a lot of the more significant expenses are going to be in wet areas.
This is where the fixtures, fittings and finishes cost the most. The size of bedrooms and living rooms, on the other hand, cost less.
Ultimately the smaller dwelling still has the same amount of kitchen and bathrooms and relevant costs, so assuming that all square meters are the same cost is flawed.
The fact is, figuring out a construction budget isn’t as simple as multiplying the number of squares by your budget per square.
You must support your numbers with knowledge and experience.
2. Hitching the Wagon of One Project to Another
One of the earliest and most important lessons I learnt developing townhouses in Melbourne was to never hitch the wagon of one project to another.
Don’t start making moves on project number two if you haven’t 100% completed project number one. It’s just too risky.
Unless of course you have the money to fund both concurrently if both don’t go to plan.
These townhouse projects almost always cost more and take longer.
Making big decisions on top of the assumption that your project will be completed by a specific time is extremely risky business.
There is an old saying which I think rings true.
If you get greedy, you get caught.
So don’t let your eyes get too big, be patient and keep your risk to a minimum and avoid hitching the wagon of one project to another at all costs.
It’s just not worth the risk.
3. Understanding How Difficult it is to Find a Good Site
I say this all the time. Just because you can develop a site, it doesn’t mean that you should.
These townhouse development sites in Melbourne can be like finding a needle in a haystack.
The number of sites I look at and discard to find a feasible site is genuinely mind-blowing.
Don’t make the fatal assumption that just because a site can be developed that it should be.
4. Knowing What You Can Achieve on a Site
It’s not uncommon when starting out doing these townhouse developments projects that you get this wrong. In fact it’s more common than not.
What you thought you would achieve and what you actually achieve can be starkly different. Which can be a massive real estate development risk for obvious reasons.
Getting this right with any level of consistency takes a lot of experience.
This is something we here at Little Fish put a lot of value on. As such, we sink a lot of time and resources into getting better. It’s something we are always refining and working on.
5. Effort Required to Sell Property Off the Plan for a Premium
This is an area we definitely undervalued in the beginning.
Not anymore. This is an area we have put significant time and resources in over our journey.
Finding ways to give potential buyers the confidence they need to act is an art form in itself. It’s another area we are always looking to improve and evolve.
There is no question we have seen a significant increase in our of the plan sale results as a direct result of the investment we’ve made in this area.
And it’s the little things that matter, attention to detail and being prepared to do what others either can’t or aren’t prepared too.
6. Greater Appreciation of Time
When undertaking a townhouse development project, time is one of your biggest enemies.
It’s no secret that time costs money, and in many cases a lot of money, so you need to be all over it.
Assuming that your contractors and providers are working on your project and in a timely manner can be costly.
Especially when you are starting out.
From experience, I can assure you that you won’t be sitting on top of your contractor’s pile and you can expect to pay a premium for their services – particularly if your project is a one-off.
Becoming a priority for your contractors can take years.
In many cases, the strength of these relationships can be the difference between whether a project is viable or not.
So put time and effort into building and nurturing strong relationships because they will pay dividends for a long time if you do.
Need help? Are you keen to undertake a side by side dual occupancy or townhouse development?
We would love to hear from you 1300 799 277.