Hi,
We're in QLD and we're beginning to seriously look at developing townhouses in the back of our property. We're engaging a town planner and architect, however I'm pushing them for things like a cost breakdown estimate, work breakdown activities, a plan showing who does what and when, etc… However I'm beginning to think this is not the norm and people are ok with writing a cheque and crossing their fingers that all will be well.Where can I go to get some of this detail? Am I being over the top in asking for this detail? I guarantee that if you did an audit on any company worth their while, these business plans and cost-benefit analysis would have been done. So then why not also do it for when you're personally going to be spending great sums of money on something that could go terribly wrong?
Please Help!
Regards,
Adam.Hi Adam,
I project manage townhouse developments in Qld. It is not necessary for you to be all things in the project, you do need to be aware of what is happening and the costs involved but having a good team is the real key. The numbers that are most important are the end sell price, cost of construction, DA costs, council contributions and your hold costs during the build.
Time frames are also important in particular the time required to get the DA up, can it be done under Risk Smart? How long is the expected build? How long will it take to rent or sell the finished product.
The next thing is to know your builder and his history, will he give a fixed price and what will he charge for variations to the contract. Trust is a key component at this point.
Do you intend to hold the finished product in your portfolio or are you intending on selling for capital gain, these each come with tax issues that you should have a property savvy accountant advise you on.
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Rana
You could try and get the information from the website or speak to a developer or a project manager with experience. Once you go down the developing path you will learn the ropes and build up the contacts along the way.
Hi Adam
Generally, a feasibility analysis is carried out prior to commencing a development project. This feasibility report should factor in all costs associated with the project and assessed against the expected end values to work out the return. If the feasibility shows a reasonable return then you move forward with your development plans.
Your cost should be based on actual estimates from consultants and contractors. If this is not possible then allowances need to be made for the various costs. The schedule of items will be based on the requirements within the project. Therefore, your report will need to be site specific.
I hope this helps.
Also, don't forget to do your due diligence on site investigations for flooding, services and storm water discharge, etc. Depending on which suburb you are located, its best to do some research and find out how much the council contributions will set you back.
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