The 1 question all developers must ask themselves
Property development can be extremely complex, requiring an acute understanding of the market and your project. However, there is 1 question all investors must ask themselves to help ensure success.
That is, who is the target buyer/renter for the property – depending on whether you intend to sell or lease the development once complete.
The answer to this question will have a large influence on your project as it can determine the location of your development (if you haven’t purchased a site yet), and it can shape the project’s size, configuration, style and amenities.
In others words, you must meet the market expectations to optimise your returns.
For example, when deciding on kitchen and bathroom cabinetry for the development, will it pay to spend the extra money to include granite benchtops or would a cheaper alternative be wiser?
The granite benchtops are probably the better option if your project is in an upper-class location and your project is aimed at wealthier buyers or renters who can afford such features. However, if it’s in a lower-class area then your target market may not necessarily require, or be able to afford, such features.
Your target market will also have a big impact on the configuration of your development.
If you’re targeting young professionals then it may be best to build 2-bedroom, 2-bathroom dwellings. However, if it’s families then 3-bedroom, 2-bathrooms may be the better option.
You’ll also have to think about what amenities would appeal to your target market, such as a shared barbeque space or pool, as well as the style and colour of the project.
So before you start making decisions on the type of development you want to build, first ask yourself, ‘who is my target buyer/renter?’. Understanding who will be best suited and most attracted to your end product can make a big difference to your final profit margin.