Insights and Resources

Two blocks can sit side by side, cost roughly the same, and have completely different development potential. The difference usually comes down to a handful of fundamentals that are easy to check before you fall in love with a site.

Zoning and planning scheme. The local planning scheme sets out what’s permitted on the site, either outright or subject to a development application. Zoning sets the ceiling on what’s realistically achievable, regardless of what the site “feels” like it could become.

Site constraints. Slope, shape, easements, vegetation protection, flooding and bushfire overlays can all quietly erode a site’s usable area and add cost. A site that looks generous on paper can shrink fast once setbacks and constraints are applied.

Services and infrastructure. Is there capacity in the existing water, sewer, power and stormwater infrastructure, or will headworks and upgrades be required? Infrastructure costs that aren’t identified early have a way of appearing later, at the worst possible time.

Market demand. Development potential on paper means little without genuine demand for what you’d build. Knowing who would buy, lease or use the finished product, and at what price, has to come before design.

Indicative costs versus realisation value. A rough feasibility, weighing construction cost, fees, contingency and finance costs against likely sale or rental value, tells you early whether an opportunity is worth pursuing further, before you spend real money on design and approvals.

Feasibility is a discipline applied at every stage, from first look through to final delivery, as real numbers replace assumptions.

Buying the property is one decision. What you do with it afterwards is a series of smaller ones, and they tend to matter more to your long-term outcome than the purchase itself.

Lease structure, if you’re leasing it out. Residential and commercial leases behave very differently. Commercial leases carry variables such as outgoings, rent reviews, make-good clauses, lease term and tenant covenant strength that affect what the property is worth to hold.

Tenant mix and quality, for commercial property. A lower headline rent from a strong, stable tenant can outperform a higher rent from a tenant likely to default or vacate. Vacancy is usually more expensive than a modest rent concession.

Maintenance and capital planning. Every property has a maintenance cycle: roofing, services, common areas, compliance items. Planning for it, rather than reacting to it, keeps a property performing and protects its value.

Hold, improve or sell. The right answer changes over time as markets, tenancy and your own circumstances shift. Revisiting the decision periodically, rather than assuming the original plan still holds, keeps a good outcome good.

Reporting you can use. Whether you self-manage or use a property manager, clear reporting on rent, outgoings and condition lets you make timely decisions instead of finding out about a problem after it’s become expensive.

A property’s purchase price is one number. What it costs and earns over the years you hold it is a different, usually more important, number.