Some Property Development FAQs that you might not have known!!

Some Property Development FAQs that you might not have known!!

What is Project Management?

Project Management is the use of skills, knowledge, processes, and activities to reach a defined end-result that could be a new or an updated product or project, a changed process or a new service. It involves several defined processes such as Initiation, Planning, Execution, Monitoring & Controlling and Closure and all the tasks related to those processes.

 

It includes managing a sequence of tasks and consultant teams and contractors from a defined project start date and end date. Irrespective of the methodology used, these processes remain the same.

 
What is a Project Management Methodology?

There are several different ways of managing a project depending on the nature of the project and a Project Management Methodology is the approach that will be used for any given project.

 

A PM methodology provides a standard method for completing a project and ensures it is managed in a controlled and consistent fashion. It aims to ensure that the project delivers a high-quality product on time and within budget.

What is the Role of the Project Manager?

The Project Manager is responsible for managing each stage of the project, the outcomes of these stages and works closely with the project team and the stakeholders/clients during these stages.

Specifically, this will include:

  • Confirm the objectives of the project
  • Ascertain assumptions and constraints that might affect the outcome
  • Identify and manage risks
  • Establish the project requirements
  • Define the project deliverables & benefits
  • Estimate and allocate resources
  • Monitor and report on project progress
  • Handle issues and changes during the project lifecycle

 

What is a Project Milestone?

A Project Milestone is simply a point in time on the project schedule where a certain deliverable will be produced, a certain task completed, or a certain event occurs. Milestones usually occur at a natural point during the project lifecycle where a related set of tasks is complete and are used to assess progress and identify issues.

What is the Difference Between a Project Schedule and a Project Plan?

A Project Schedule is part of a Project Plan and includes a list of tasks, estimates, resource allocations, milestones, dependencies and planned start and finish dates for each task. It is used to track the progress of the project.

A Project Plan is the collection of several documents concerning different areas of Project Management such as:

  • Communication
  • Risk Management
  • Quality Control
  • Project Schedule
  • Costs
  • Scope

What is a Project Risk?

A Project Risk is an event that may or may not occur during the project lifecycle that is predicted to have a negative impact on the aim of the project. There are a variety of different types of risk that can be anticipated that could affect the outcome; broadly these can be categorised as:

  • Financial – the estimated costs are inaccurate
  • Functional – the product may not meet the original specifications
  • Technical – new technology required for the project does not meet expectations
  • Personnel – key staff members may leave

The assessment of risks should be an on-going task throughout the lifecycle of the project. JC Project Consulting will provide a risk register for your project and track these risks throughout the project.

 

What is a Design Manager?

 

A Design Manager is someone who manages all the processes in relation to producing a set of drawings that a building can be built from.  They are also known as Design Coordinators or Design and Build Managers.  This can be a challenging and highly satisfying role with the manager playing a key part in the success of a building project.

 

They are highly motivated, professional individuals and are asked to use their organisational skills to bring together architects, structural engineers and services engineers, along with specialist designers, with the aim of producing a coordinated design.

 

What does a Design Manager do?

 

Their work involves:

 

  • Managing a design team;
  • Managing the design process using his/her commercial, contractual, programme/time awareness and technical expertise;
  • Supporting, understanding and advising the client as to the requirements and his/her obligations in the development of a building design;
  • Encouraging and inspiring design consultants to produce their best work using their full flair, experience, resources and talents in a cost-effective way;
  • Ensuring the design process recognises current legislation, standards and codes of practice, where appropriate;
  • Ensuring design information is of the right quality and keeps pace with project timescales; and
  • Striving to eliminate health and safety risks in the design and financial risks during construction.

 

What is a Property Developer?

 

“Property Developers buy land, finance real estate deals, build or have builders build projects, create, imagine, control and orchestrate the process of development from the beginning to end” Wikipedia

 

What’s my development strategy?

 

Only you can answer this one.  It’s important to determine your own development strategy and your investing criteria prior to looking at a potential development. Your Development or Project Manager can assist you with this.

Your strategy may include:

  • Land Subdivision
  • Subdivide & develop new on subdivided land
  • Renovate and add value to an existing dwelling
  • Renovate an existing dwelling and build new units also on the land
  • low-density development
  • Medium density development
  • Large/Major development

 

How much money will I need?

 

You should have a clear picture of your financial position and how much you are prepared to invest into a development. Your level of investment will help to determine your development strategy.  A simple land subdivision will be less costly (but not necessarily quicker) than a low-density development for example.

 

How much profit should I be making?

 

Profit can come in many forms; short-medium term cashflow, long term capital growth, rental yield, depreciation or tax returns and equity. As part of your strategy, you will need to determine your financial and personal objectives.

 

Each form of profit will mean a different approach and outcomes, you also need to seek the advice of professionals on this. A good starting point is your accountant to ensure you understand the GST, CGT and other tax implications of your plans.

 

What’s the one thing you need before you put an offer in?

 

A conditional loan approval.  Knowing that you have a pre-approval to a certain amount is a valuable negotiation tool.  Ensure you tell the agent that you have your finance approved as you make your offer, so they understand that you are serious and can follow through on your offer.

 

What are some of the pre-purchase checks you should do?

 

  • Engage JC Project Consulting to provide you with Development Advisory of development options for consideration.
  • Survey – this will show the dimensions, description of the property, any Covenants easements and/or encroachments to the land.
  • Review the Sales & Purchase Agreement – use the professional services of a conveyance or solicitor.
  • Obtain a LIM
  • Have a discussion with a Planner or council about what can and can’t be done with the land and or buildings. There are always limits that can be stretched subject to the type of non-compliance.

 

Two important requirements to do either during due diligence or when you have access to the land;

 

  1. Survey – Arrange for a Detailed Topographical survey – this is needed to supply to your architect and consultant teams

 

2. Arrange a Geotechnical report – this will determine the site and soil classification and ultimately have a bearing on then engineering for your slab or foundation design.  If you think the site could be risky for example if you think it may be undermined or have a water course near or below it, have a Geotech assessment report done before you exchange or secure the site.

 

Who do I need on my Development Team?

 

  • JC Project Consulting – Development Project Manager – to guide you through the entire process
  • Property Specialist Accountant & Solicitor
  • Finance Broker or personal banker
  • Quantity Surveyor
  • Surveyor
  • Architect/draftsperson
  • Planner
  • Civil Engineer
  • Structural Engineer
  • Other consultants as required
  • Real Estate/Commercial Agent (Subject to your development type)

 

Who do I need in my team for the start of my project?

 

You’ll need a development project manager such as JC Project Consulting Ltd, surveyor, architect or draftsperson, Geotech & planning consultant

 

Where do I start?

 

You must start with clear concept of what you want to achieve.  Here are some questions to ask yourself…

 

  • How many dwellings do you want to get onto the land? This will be dependent on town planning rules.
  • How much profit do I want to create by developing this land?
  • Design single, two or three story units – what does the market want?
  • Are you building to hold or sell?
  • Who is the target market – tenants or owner occupiers?
  • If holding, what are tenants looking for??
  • What is the typology demand? i.e., no’s of bedrooms for example
  • What do I need to do to differentiate my development in the market?
  • How much can you finance?  It’s extremely important to have an understanding of your finances.
  • What is the best structure to purchase and develop in?  This is a good question for your accountant.

 

What do I do once I’ve found or own some land to develop?

 

The first thing you’ll need to do is engage JC Project Consulting Ltd who will procure your development team. Once the team is procured the surveyor will complete a contour and detailed survey. Once the survey is completed this will be provided onto the architect. They need this to start on the concept plan.

 

As identified earlier another important investigation is getting a geotechnical report underway. This information is very important to understand as unknown ground conditions can be very expensive if not fully understood.

 

What is a Project Schedule?

 

At JC Project Consulting we prepare an initial project programme that shows our clients the estimated timeline for the project. Each project is different and will take different amounts of times over each phase, but our job is to keep the project moving forward as efficiently as possible.

 

Using the services of a JC Project Consulting can really assist especially if it’s your fist project as you’ll learn so much from being guided through the often-complex process of property developing.

 

How do I complete a Feasibility Study?

 

It’s important you undertake a detailed feasibility analysis before you decide to proceed with your development.

 

The main purpose of a Feasibility Study is to gain a financial appraisal to determine whether the project is feasible.  You need to assess the value of the land or property, the practicality of a proposed design, the estimated costs for the build, the possibility of costly delays in the schedule, strategies for achieving sales projections, and the repayment terms of the investment finance.

You are then in a position to review the proposed property development in the light of your commitments on other projects, your cash flow, your financing costs and your projected profit to make a decision as to whether to proceed.

 

The benefit of engaging a PM?

 

A project manager can help you to fast track your development. A good project manager will:

  • Save you money
  • Save you time
  • Minimize your risk
  • Manage your development
  • Give you access to sites not on open market
  • Professionally manage, record and report the process for you
  • Share their local knowledge, experience, contacts, suppliers

 

For a no obligation chat about your project contact us HERE

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