MULTIPLY RETURNS WITH A MULTI-UNIT DEVELOPMENT
Increasing your development yield is possible with dual occupancy, duplex and multi-unit developments, but if you have the means and the right team to work with a multi-unit development will help you reap the biggest rewards – whether you choose to buy or to sell. So is a multi-unit development right for you?
What is a multi-unit development?
A multi-unit development takes advantage of higher density zoning to provide the opportunity to build multiple units on one block of land. The number of units can start from as little as three and can extend to as many as the property, council restrictions and budget allows. The more units that can comfortably fit within your property the greater potential you have for increasing your return on investment – that is increased equity, rental returns and/or profits.
How many units and what size is best?
Before you secure your block of land, try to do some research in the surrounding area. If your suburb attracts a lot of young families who want a private courtyard and a little extra space, then you might find larger townhouses are what the area demands. Alternatively if your property is close to a University or is in an inner-city area, which attracts a lot of single renters/buyers or young couples, then multiple one-bedroom and studio style apartments might be a better option. Knowing your target market will also help you determine what extras you should include in the design plans.
Should you sell or rent your multi-unit development?
Selling or renting really comes down to the individual (or property syndicate) investment goals and the funds that are available to them. For example, selling brand new units is the quickest way to pocket a return. However, if the rental market in your area is strong enough, the maintenance and property management fees etc. will be far outweighed by the rental income you stand to make. It is wise to get a financial planner or your bank to help breakdown the potential costs versus return for all options and go from there.
Next steps for developers and investors…
If you have decided to build a multi-unit development, have selected your property and have established your financial goals, then the next step is to get the project underway. There are many specialist companies who can work through the complete process for you – an invaluable advantage for first-time developers or investors – including initial feasibility, concept design, pre-development negotiations with council, subsequent approval and scheduled construction of the project. Regardless of your experience, try to find a company with experience building multi-unit developments to increase your chance of a solid return on investment.
Valley Homes is your local company servicing Newcastle, Maitland and the Hunter Valley, specialising in providing small to medium density construction solutions for investors and developers. Our team has experience with the construction of both large-scale government and smaller private projects. Talk to us about your multi-unit development plans.