Property Development

The property location was selected on basis of the checklist for all good property development. I will highlight these points as we go through my experiences.

This property became the second plank in my strategy for wealth creation!

The first consideration when selecting the location of your property is it's distance from the CBD. Most property investors have learned over many years that somewhere within 10 kms of the major CBD is a good starting point.

The next consideration is the transport links from your property to the major shopping and employment areas. Buses, trains and the major roads now become very key in the selection process.
My first property is within a stones throw of a train station!

The now completed but then newly developing Tonkin Highway was 2 minutes away by car!
We also had Albany Highway a 5 minute drive away!

The photo I have attached shows the house just at lock-up. It gives you the impression that all the building is over and all went well.
This could not be farther from the truth!
When the builders had started the fist few courses of bricks Perth experienced a dramatic delay in brick deliveries. Why? Well the boom in housing at the time was really starting to ramp up and the result was a severe shortage in bricks. My builder was one of the people to suffer as a consequence - this led to quite a few weeks of delay and in the end the house was in fact a year late in construction!

The other issue that we were unaware of at the time was that our builder was in fact building a few too many homes at the same time and was finding it difficult to co-ordinate the work teams to get around to each of the houses - thus delaying all!

Our situation got so bad in the end that in fact the builder was sacked by the developer and we were left with a partially completed house! Up to this time we had not spent a lot of money since we held the property with a deposit bond - so we only had to pay a few hundred dollars to keep in the deal. Normally you pay a deposit (ours would have been $16000) and payment in full later on.

We next get a letter from the developer saying if we wish to keep our property we must pay the $16000 in full within 3-4days! Wow, we were not expecting that! However we had the money and paid up to keep our house!

Many investors failed the deadline and lost their property - a big blow when we were already seeing good capital gains on the area. I was very glad of the financial advice and structures we had put in place six months earlier. The Investors Club financial advisors had put us in a very good position and we were so glad of it.

Well we survived all the madness and we ended up with our house ready - much later than expected but already worth far more than we paid for it! In fact by the time it was tenanted we saw a doubling in it's value and today the rent pays the mortgage!