June 2, 2020
3 Questions to Assess Potential Block Subdivision Developments
Block Subdivision Developments are a great way to become involved in property development in your local area. This style of development offers the option of creating a new home for the developer and selling the other, or selling both.
With all property development the financial outcome is largely determined at the time of site acquisition.
Starting with the outcome and working backwards provides clarity and objectivity. How much will the target market pay for your product over and above site and delivery cost? Maximising this outcome is the key to successful development.
When reviewing a potential block subdivision site , we ask ourselves three questions,
- Who is the target market for the development?
- What are the alternative development outcomes for the site?
- Which combination of development outcome and target market will optimise profit?
The output from these questions forms the basis of our financial feasibility and we either reject the site or move to acquisition with a clear view on the price for the site that will provide an acceptable profit.
Try this approach next time you are considering a block subdivision site and let me know if this works for you.
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