25 Aug What due diligence do we need to do to make sure we’re getting the right property? – Bryce Yardney
In today’s show Bryce Yardney, from Metropole Property Strategists, helps us with the suburb due diligence you need to do before committing to a development project.
Kevin: Last weekend in the show, I was talking to Bryce Yardney about the due diligence you need to do to find the right suburb to do a development, and we’re particularly talking about developments now. Bryce returns with me once again.
Bryce, this time, I want to pick up on the conversation about once we’ve decided on that suburb, what due diligence do we need to do to make sure we’re getting the right property?
Bryce: Absolutely. The first thing I do when I’m looking for a development is I start with the physical characteristics – with the size, the shape, the slope, the existing house on there, trees, power poles, driveways, all these physical things that can come in to play and restrict what you can do with a site.
Once they all check out, then you have to start looking at all the other things – like your easements, your overlays, your title restrictions, covenants, planning restrictions, planning zones. You have to look at all these other things because, unfortunately, any one of them can be a deal breaker for developments, so you have to cover them all.
Kevin: In your opinion, what are the biggest restrictions to properties that will make then undevelopable, if there’s such a word?
Bryce: One of the biggest things I come into – and it’s something that is, I guess, a little bit unpredictable and sometimes people miss – is trees. Certain councils are not too bad, but for a lot of them, trees become sacred.
There’s a completely different set of rules. If you’re going to buy this property to build your own home on, you can do whatever you want to it. You can knock down trees and build your home. As soon as you’re putting two or more units on a single lot, it’s a completely different set of rules. Now you have to go through council, now you have to get a planning permit, and now it’s completely set of rules when it comes to trees and what you can remove.
It’s not just trees in your own property, either. You have to look at trees on neighboring properties, because they’re all going to have a tree protection zone around them. You can’t build inside that tree protection zone, so you’ve got to keep in mind neighboring trees, as well, street tress, as well. Strictly, they’re council property, they’re not yours, in certain councils, street trees are scared. You have to be really, really careful. Probably get your arborist in there before you buy the property, as well, to get it all double checked.
Kevin: Bryce, if you see a development coming up down the road, or you see one, in fact, in the area that you’re looking at developing that’s been recently completed, is that a good sign for you?
Bryce: It’s a good sign, but it’s not the be all, end all. Especially in Victoria is a perfect example. We went through some planning changes just over 12 months ago. A development that’s being built even right now, they could have got planning approval for that four or five years ago under the old set of rules. If you went and bought a property today and tried to get the same planning approval for that kind of development, you’re now working under a completely different set of rules. You have to know the new rules inside and out before you get into anything.
Kevin: What are the site attributes that you look for when you’re doing your due diligence?
Bryce: I guess you really got to have the end goal in mind. You have to know what you want to put on there, and then work backwards. You have to look at what’s going to restrict you. Is it going to be the size? Is it going to be a tree on the property or the neighboring property? Is it going to be an overlay? Is it going to be a flood zone where you have to suddenly build up? And then your height restrictions are going to come in to play. That’s the way I do. You have to have the end goal in mind, and then work backwards.
Kevin: Okay. Just to round us out, what are the biggest mistakes you see budding developers make when they’re looking for a development site?
Bryce: Probably the biggest mistake is not having the right team around them, not doing their due diligence at the start and having someone on their team who can help them with that, can help them through their planning approval, can help them with their designs and their construction – I guess, trying to do it themselves.
It’s probably the biggest investment people are going to make in their lives – we’re talking a couple of million dollars – so you have to have the right team around you to help you to get through it.
Kevin: Yes. If you want to contact Bryce and his team, you can do it through the website Metropole.com.au, Metropole Property Strategists.
Bryce Yardney has been my guest. Bryce, thanks for your time.
Bryce: Thank you, Kevin.