Why property development is a 'long-term game'
After representing Australia at the 2012 London Olympics, Ed Fernon found a new venture in property development. Much like working to win a gold medal, he had come to realize that being successful in the business of creating wealth through property takes commitment, dedication, and a good plan of action.
According to the former Olympian, property development entails many different processes aside from just building and developing.
"There's a huge number of stages even before that in terms of finding the sites, negotiating the deals, plans, permits, approvals, and a lot of people just go through that and don't even worry about the risk associated with the development. And then there's the selling side of things and the complete project management," he said.
While it's definitely a long and often stressful process, it is important for property developers to understand all the stages that they have to go through for them to ultimately succeed in the field.
Smart Property Investment's Phil Tarrant believes that this "grunt work" behind the scenes will benefit prospective property developers by helping them understand the market and make sure that they make the right decisions—from the construction phase to the ultimate outcome of their development endeavors.
"Property's a long-term game, so it's about identifying areas... which are going to grow [in the future]. And you may need to hold a property for two, three cycles before you can realise the true potential for it. And that might be development potential and that's obviously your game—it's about doing the groundwork as well, you know?" Phil said.
"You've got to actually burn the shoe leather and do a lot of research to actually understand and work out what are the drivers for infrastructure development [and] how long that takes, how that's going to influence the prices, where you buy, when you buy, how you buy. It's a full-time job."
Ed's advice to prospective property developers is to find people you can trust to help you navigate your way through your journey.
"You can't do everything, so... if you're going to do the whole thing, finding really, really good solid people who you trust in those different roles to provide those other services that you're not doing," he said.
"Or just saying, okay, maybe I'm really good at negotiating deals or putting plans together, I'll just focus on that rather than trying to do all of it yourself."
"A lot of people just go in there. They do that and then they're done and they're like, 'Oh, gee. That was a stressful process...' But if you want to be engaged, if you want to have control over your money and you want something that you can see benefit from in terms of what you're actually doing and being able to control that asset, then I think property's a great vehicle to do that," he concluded.
Tune in to Ed Fernon's bonus episode on The Smart Property Investment Show to know more about the necessary “grunt work” that will benefit prospective property developers by enabling them a better understanding of their market—influencing not only their decisions during the construction phase but the ultimate outcome of their development endeavors.
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