Every successful property developer will tell you that the real secret to successful property development, is managing the inherent risks.
Identifying
and avoiding risk can be complicated, because of the many different types of
development schemes and the varied challenges, each project presents.
Property
development is speculative and always includes a measure of risk.
A property
developer’s best friends are comprehensive due diligence, water tight contracts
and appropriate insurance cover.
Here are some
points to consider when embarking on a new development venture:
· Consider
carefully, the structure in which you will be doing business ie joint venture,
unit trust, real estate investment trust
· Foreign
investors may require special approval and every investor will want an
assurance of the likelihood of profit
· Lenders
will require security in the form of a mortgage
· The
transfer may be a direct transfer from one to entity to another, an acquisition
of the shares/units held by the owner, a call option or a long=term lease
· Each
state/territory has separate legislation that covers title, general property
matters, Crown lands, consumer protection, planning, land use and Native title
· Local
government and all other approvals must be obtained before you begin
· Authorities
can pursue the owner, occupier and mortgagee of the land if an industrial
polluter is insolvent or cannot be foun
· Construction
sites must comply will all health and safety and licencing regulations
· Owners
will incur annual rates and taxes levied by state/territory and local
authorities
· Engage
a good property lawyer to undertake a thorough document review at the earliest
stages of the deal
· It
is vital to negotiate protective provisions such as indemnity clauses, methods
of dispute resolution and appropriate insurance coverage.
Need a property or development loan?
Contact us @ propertyloans@realrenta.com
Marlene Liontis
Friday, 25 October 2019
