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How to Start a Property Development Business in Australia

Do you want to start a property development business in Australia? If YES, here is a 20-step guide on how to start a property development business with no money or experience. Please note that if you intend to start this type of business, it is advisable to first look at the existing laws and zonal regulations in Australia or the city you reside in to know what is expected of you.

The bottom line is that you need to pay a visit to the regulatory bodies in your city to know what you need to do before you can legally launch your property development business in Australia. You can start your property development business from a small town in Australia and if you are good at what you do, it won’t be too long before your brand becomes nationally recognized especially if you go into franchising.

20 Steps on How to Start a Property Development Business in Australia

  1. Understand the Industry

Property development business in Australia is part of the Land Development and Subdivision Industry and players in this industry primarily subdivide and amalgamate land into lots. Companies also prepare and service land for subsequent sale, including performing excavation work for installing roads and utility lines.

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Interestingly, the Land Development and Subdivision industry’s performance primarily depends on trends in the preparation of land for new dwelling commencements and the development of land for non-residential buildings and other non-building applications.

Although the industry is involved in developing brownfield projects, the majority of industry activity includes developing greenfield land (not previously developed). The industry’s long-term performance has been constrained by the trend in residential building construction towards higher density apartment developments rather than traditional single-unit housing. This trend reflects the growing preference for inner-city living and the rising price of land.

The Land Development and Subdivision industry in Australia is indeed a large industry and pretty much active in every city in the country. Statistics has it that there are about 10,834 registered and licensed land development and subdivision companies (property development companies) scattered all across Australia responsible for employing about 19,737 people and the industry rakes in a whooping sum of $13 billion annually.

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The industry is projected to grow at 6.2 percent annual growth within 2015 and 2020. It is important to state that companies with the largest available market share in the industry in Australia are; AVID Property Group, DevelopmentWA, Infrastructure NSW and Satterley Property Group Pty Ltd.

A recent report published by IBISWorld shows that the Land Development and Subdivision industry’s revenue growth is expected to be significantly affected by the COVID-19 pandemic. In particular, construction delays stemming from disruptions in the supply chain for building materials and the supply of skilled labour are likely to constrain industry performance.

Over and beyond, the property development sector in Australia is known to be a major contributor in the economy of the country and the industry is notable for producing some of the richest men in Australia and you can become one of them if you are ready to pay the price.

  1. Conduct Market Research and Feasibility Studies

  • Demographics and Psychographics
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The demographic and psychographic composition of those who do business with property development companies cut across individuals and businesses. The truth is that when it comes to purchasing, leasing or renting properties, there is indeed a wide range of available customers.

In essence, your target market can’t be restricted to just people you are developing properties within your location, but all the businesses and investors in and around the city where you have your business presence.

  1. Decide Which Niche to Concentrate On

It is safe to say that there is no niche area in the property development line of business, as every player in the industry primarily engages in acquiring, constructing, remodeling and renovating the interiors and exterior of properties and then put them up for sale.

On the other hand, a property development company may decide to major on any of the under listed;

  • Houses and housing estate developments
  • Apartments and other residential developments
  • Commercial developments
  • Industrial developments
  • Other developments (Investment Properties)
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The Level of Competition in the Land Development and Subdivision industry in Australia

The competition that exists in the line of business goes beyond competitions amongst property development businesses in your location; you are expected to compete with other businesses in the real estate industry who are also into property purchasing and selling. So, it will be right to say the competition in the property development line of business is tough.

The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your services or business properly, you will always make headway in the industry. Just ensure that you invest in attractive properties with good return on investment (ROI), you can deliver excellent customer care services and you know how to attract and reach out to your target market.

  1. Know Your Major Competitors in the Industry

Here are some of the most popular property development companies in Australia;

  • AVID Property Group
  • DevelopmentWA
  • Infrastructure NSW
  • Satterley Property Group Pty Ltd
  • AVJennings Limited
  • Development Victoria
  • Frasers Property Australia Pty Limited
  • Peet Limited Market Share: x.x% lock
  • Salta Properties Pty Ltd
  • Austcorp Property Development
  • Metroland Australia
  • Reed Property Group
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Economic Analysis

If you are planning towards successfully launching a business and maximizing profits, then you need to ensure that you get your economic and cost analysis right and try as much as possible to adopt international best practices in the industry you choose to build a business in.

Property development business is not a green business, as a matter of fact; you will come across several property development companies when you drive through town, search through directories and browse through the internet. So, if you are mapping out your economic and cost analysis, you should carry out thorough market survey and find out the amount needed to rent a space where you are expected to open your property development business, the capital that is required to start, and cost to successfully run the business.

Over and above, if you are considering starting a property development company, then your concern should not be limited to the cost of renting an office space, securing your license, and working capital, but also on branding and on how to build a robust clientele base. The truth is that if you are able to build a robust clientele base, you are sure going to maximize profits in the business.

  1. Decide Whether to Buy a Franchise or Start from Scratch

If you are looking towards starting a property development company in Australia, you would have to start from the very scratch because you can hardly get a franchise of a property development company to buy in Australia.

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Besides starting a property development company from the scratch is less stressful when compared to other related businesses. With a property development company, you should just try as much as possible to get the right employees, build business relationship with key stakeholders and investors and then leverage on every marketing tools within your disposal especially the internet when it comes to marketing your services and properties.

If you decide to buy a property development franchise in Australia, this is an available company to use;

  • MBCM Strata Specialists
  1. Know the Possible Threats and Challenges You Will Face

If you decide to start your property development business today in Australia, one of the major challenges you are likely going to face is the presence of well – established and all-purpose property development companies in your target market location. The only way to avoid this challenge is to create your own market; concentrate on households, small offices, startup construction companies, house staging companies etc, who need the services of a property development businesses.

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Some other threats and challenges that you are likely going to face when you start your property development business are mature markets, bad economy (economy downturn), stiff competition, volatile costs, and the advent of another pandemic.

  1. Choose the Most Suitable Legal Entity

Generally, you can either choose a Sole trader, Partnership, Company or Trust for your property development company. Ordinarily, partnership should have been the ideal business structure for a small – scale property development business in a small neighborhood. But if your intention is to grow the business and sell franchise all across Australia, then choosing sole trader is not an option for you.

Please note that if you settle for a Company, then you should be aware that Companies are regulated by the Australian Securities & Investments Commission (ASIC) and you must apply for a tax file number (TFN) and use it when lodging its annual tax return. You will be entitled to an Australian business number (ABN) if it is registered under the Corporations Act 2001. A company not registered under the Corporations law may register for an ABN if it is carrying on an enterprise in Australia and you must be registered for GST if its annual GST turnover is $75,000 or more.

  1. Choose a Catchy Business Name from the Ideas Below

Normally, when it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Typically, it is the norm for people to follow the trend in the industry they intend operating from when naming their business.

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If you are considering starting your own property development business in Australia, here are some catchy names that you can choose from;

  • Roof Top® Real Estate Development Company
  • Gold Coast® Real Estate Developers, Pty Ltd
  • Nathan Wigglesworth© Real Estate Developers, Pty Ltd
  • Kings Court® Real Estate Development Company, Pty Ltd
  • Great Tower™ Real Estate Development Company, Pty Ltd
  • Herad Nelson & Co™ Real Estate Development Group
  • Jasper Kriege© Real Estate Development Company, Pty Ltd
  • West Coast® Real Estate Development Company, Pty Ltd
  • Vintage Group© Real Estate Development Company
  • Jeffery Jason & Sons© Real Estate Development Company, Pty Ltd
  1. Discuss with an Agent to Know the Best Insurance Policies for You

In Australia and in most countries of the world, you can’t operate a business without having some of the basic insurance policies that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your business.

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Here are some of the basic insurance policies that you should consider purchasing if you want to start your own property development business in Australia;

  • General insurance
  • Health insurance
  • Public Liability insurance
  • Risk Insurance
  • Income Protection Insurance
  • Workers compensation
  • Overhead expense disability insurance
  • Business owner’s policy group insurance

You can contact the following leading insurance companies in Australia to purchase the needed insurance policies for your property development business;

  • Truckers Insurance HQ
  • Seniors Insurance Co
  • Coles Insurance
  • Woolworths
  • Australia Post
  1. Protect your Intellectual Property With Trademark, Copyrights, Patents

If you are considering starting your own property development business in Australia, usually you may not have any need to file for intellectual property protection/trademark. This is so because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

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But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application through the IP Australia website. Please note that applying for a trademark using the standard filing service will cost between $250 to $550 per class.

  1. Get the Necessary Professional Certification

Aside from the results you produce as it relates to running a property development company, professional certification is one of the main reasons why most property development companies stand out. If you want to make an impact in the industry, you should work towards acquiring all the needed certifications in your area of specialization. Certification validates your competency and shows that you are highly skilled, committed to your career, and up-to-date in this competitive market.

These are some of the certifications you can work towards achieving if you want to run your own property development company;

  • Certified Commercial Investment Member (CCIM)
  • Real Estate Investment Certificate
  • Real Estate Professional Assistant (REPA) Certification
  • Certified Commercial Real Estate Advisor (CCREA)
  • Chartered Real Estate Professionals – CREP
  • Degree / Diploma in Real Estate and Building Engineering Related Courses
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Please note that you cannot successfully run a property development company in Australia without necessarily acquiring professional certifications and business license even if you have adequate experience cum background in the real estate industry.

  1. Get the Necessary Legal Documents You Need to Operate

It is a fact that you cannot successfully run any business in Australia without the proper documentations. If you do, it won’t be too long before the long hands of the law catch up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run a business in Australia;

  • Australian Business Number (ABN)
  • Goods and Services Tax (GST)
  • Business and liability insurance
  • Council Permit
  • Global Real Estate License (Optional)
  • Business License
  • Business Plan
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Online Terms of Use (if you have a website)
  • Online Privacy Policy Document (basically for online payment portal)
  • Company Bylaws
  • Memorandum of Understanding (MoU)
  • Commercial Vehicle Operator’s Registration for trucks
  1. Raise the Needed Startup Capital

Starting a property development business is capital intensive even if you choose to start on a small scale. Securing a standard office space in a business district, and raising working capital are part of what will consume a large chunk of your startup capital. If you choose to start the business on a large scale, you need to go source for fund to finance the business because it is expensive to start a standard large scale property development business.

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No doubt when it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.

Here are some of the options you can explore when sourcing for startup capital for your property development business;

  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Source for soft loans from your family members and your friends.
  1. Choose a Suitable Location for your Business

Generally, in business, it cannot be overemphasized that the location you choose to start your business is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where there are high real estate activities and households with the require purchasing power, and lifestyle. If you make the mistake of renting or leasing an office facility for your real estate development business in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business.

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It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing / renting in your budget. If you are new to the dynamics of choosing a location for your business, then you should feel free to talk to a business consultant or a realtor.

Having said that, these are some of the cities in Australia where you can locate your property development business;

  • Sydney
  • Melbourne
  • Brisbane
  • Perth
  • Adelaide
  • Gold Coast
  • Newcastle
  • Canberra
  1. Hire Employees for your Technical and Manpower Needs

There are no special technology or equipment needed to run a real estate development company but you will definitely need computers/laptops, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.

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As regard leasing or outright purchase of an office facility, the choice is dependent on your financial standings, but the truth is that to be on the safe side, it is advisable to start off with a short – term rent / lease while test running the business in the location. If things work out as planned, then you go on a long – term lease or outright purchase of the property but if not, then move on and source for other ideal location/facility.

When it comes to hiring employees, you should make plans to hire a competent Chief Executive Officer/President (you can occupy this role), Admin and Human Resources Manager, Project Manager, Company’s Lawyer / Secretary, Head of Construction, Head of Assets Management, Head of Acquisition and Disposition, Sales and Marketing Officer, Accounting Clerk, and Front Desk Officer.

On the average, you will need a minimum of 5 to 10 key staff members to run a small – scale but standard property development company.

Please note that this number does not include workers in construction sites.

Service Delivery Process of a Property Development Business

The way property development companies work vary from one company to another, but ideally, a property development company is expected to first and foremost build a robust company’s profile, and pool investment capital from investors before going out there to acquire properties, renovate the properties and then put the properties for sale, lease or rent; it will give them edge amongst their competitors.

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Before a deal is sealed, a property development company is expected to carry out inspection on the location and the type of renovation or construction work that will be carried out on the property. This will enable them know the know the amount needed for renovating the property and the current market value of same properties within the geographical location.

It is important to state that a property development company may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility.

  1. Write a Marketing Plan Packed with Ideas & Strategies

Generally, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a property development business, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction for real estate development line of business.

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So, when you are drafting your marketing plans, make sure that you create a compelling company profile. Aside from your qualifications and experience in the Trades and Land Development and Subdivision industry in Australia, it is important to clearly state what you have been able to achieve in time past. This will help boost your chances in the market place.

Here are some of the platforms you can utilize to market your property development business;

  • Introduce your property development company by sending introductory letters alongside your brochure to households, estate managers, corporate organizations, small and medium scale businesses and other key stake holders throughout the city where your real estate development company is located.
  • Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
  • Create a basic website for your business so as to give your business an online presence
  • Directly market your services
  • Join local property development business associations for industry trends and tips
  • Join local chambers of commerce and industry with the aim of marketing your services
  • Advertise our business in community – based newspapers, local TV and radio stations
  • List your business on yellow pages ads (local directories)
  • Encourage the use of word of mouth marketing (referrals)
  1. Work Out a Reasonable Pricing for your Services & Products

One key factor that will help you sell/rent/lease your properties at a price that is highly attractive is to ensure that you source your startup capital from sources that won’t put pressure on you or give you high interest rate. So also, it is important that you purchase your properties directly from the owner of the property as against buying from a third-party dealer.

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When it comes to building materials, it is advisable that you also purchase them directly from the manufacturers or from wholesalers. Another strategy that will help you get the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name.

Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your services. So also, if you are able to secure business partnership as it relates to getting referrals, then you will be able to get the right pricing and of course maximize profits from your business.

  1. Develop Iron-clad Competitive Strategies to Help You Win

The availability of a huge working capital base, your business process and of course your pricing model are part of what you need to stay competitive in the industry.

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Another possible competitive strategy for winning your competitors in this particular industry is to build a robust clientele base and business network. Over and above, ensure that your organization is well positioned, key members of your team are highly qualified and your facilities and offers to investors can favorably compete with some of the best in the industry.

  1. Brainstorm Possible Ways to Retain Clients & Customers

When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your products and service delivery, they can hardly source for alternative service providers.

If your services and customer service fluctuate, you are likely going to struggle to get your customers retaining your services. Ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeated sales from them and also to attract new customers.

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Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers and building a loyal clientele base, you should purchase a customized CRM software.

With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all, you can easily receive compliant and feedback from them).

  1. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

If you are in business and you are not conscious about boosting your brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secrets of larger corporations is that they are willing to spend good money to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.

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No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand and create a corporate identity for your property development business;

  • Place adverts on both print (newspapers and construction/real estate related magazines) and electronic media platforms
  • Sponsor relevant community – based events / programs
  • Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your property development business
  • Install your Bill Boards in strategic locations
  • Distribute your fliers and handbills in target areas
  • List your property development business in local directories / yellow pages
  • Advertise your property development business in your official website and employ strategies that will help you pull traffic to the site.
  • Position your Flexi Banners at strategic positions in the locations where your property development business operates.
  • Ensure that all your staff members wear your branded shirts and all your vehicles and vans are well branded with your company logo et al.