|Strategic Property Development
The Development Approval (DA) and Complying Development Certificates (CDC) are the
most popular type of building approval opportunities for property investors to make a profit
from their properties. DA is the authority granted by the local council to the development of
a parcel of land. CDC may be granted by private certifiers or your local council. BC is the
authority granted by local council to the building of a particular structure on a parcel of land.
Since DA blocks of land are of greater value more than pre-approved property, investors
have the opportunity to profits by purchasing land with the aim to obtain Development
and/or Building approval by local council to then on-sell to a buyer who wishes to complete
the development process.
The Keys To Property Development include:
* Negotiating an Option Contract with the vendor
* Seeking control rather than outright ownership
* Pre-lodgement meetings with council
* Having an understanding of council policies and aims
* Experienced in lodging DA and BC applications
What Are The Financial Requirements?
The financing of these types of development projects can be 60-70% LVR. However,
finance providers may lend more once the council has granted you development approval.
Some of the costs you will need to budget for include the costs to gain development and
building approval for a block of land usually involve an option fee, cost of plan, professional
consultant fees, council application fees and other legal fees. Reports and sometimes tests
may be required to obtain council approval. You will need to understand that these costs
may not be recovered if the council declines your development application.
Time frame and exit strategies:
The time frame for gaining development and building approval vary depending on the
council and project complexity. Often, the investors can either sell the approved land to the
developers, or add on a plan then sell to the end customers.
The return perspective:
The large-scale project could make very good profits. Smaller scale projects are also quite
profitable with ROI as high as 1000% within months.
Using this strategy is a good way to create sizable wealth. The investors often only pay for
the option fees and application stage costs. Many land developers are willing to let another
source to finance the approval stage to avoid waiting period.
Investing in the development approval stage generates great return with low cost to entry.
What Are The potential risks and difficulties?
The council might decide not to grant the approval for the proposed development or
building if they find the proposal doesn't fit their town plan. The investors would need to
carry the financial loss of proposal preparation up to that point.
In some cases, the waiting period for council approval could be a lot longer than expected.
Without strong financing, investors might not able to withstand the holding costs of the
It's hard to predict the length of the waiting period for gaining development and building
approval and the possibility of an application approval being granted.
If you are an investor, it can be difficult to find good investment opportunities. Real Estate
Strategist Approvals can offer you the necessary knowledge, tools, experience and
connections to assist you with your DA & Construction Certificate requirements saving you
time, money and unnecessary delays to maximise your return on investment.
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develop for increased return on investment, we can help streamline the council approval
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