As property buyers, developers and sellers, we’ve always gone into each and every property deal with a win win mindset.
When buying a development potential block, as an investor you want to make sure that you are buying it for the right price. This means doing your feasibility studies, checking current market prices for similar properties in the area and working out what your on-completion value of the development will be. It also means paying a fair price to the seller so that they get a win. In older, established areas, this happens more often as the property has usually had significant capital growth if the seller was the original owner. Finding a bargain is always great but buying at fair market value is also a win for the seller and a win for you as the developer. What you need to watch out for are sellers that are trying to price their undeveloped land at ‘potentially’ developed prices. This may be a win for them but it doesn’t take into account the money you need to spend to actually fulfill that potential. In this case, it’s best to negotiate or find a more realistic seller.
On the flip side, when you are selling a developed property, again, you are entitled to a win by achieving fair market value. If you have built the right property for the area and market, this should be easy to achieve. However, if you have built the wrong product for the market, or have tried to keep your build costs down by leaving finishing items up to the purchaser, you can’t expect them to be paying top dollar. The buyer needs a win as well in getting a property that not only meets market value now but also has the potential for capital growth without them having to spend additional money in bringing it up to scratch.
If you go into every transaction leaving something in it for the other party … everyone’s a winner!