It is always good idea to determine your borrowing capacity early in the process and work out if the property development is right for your situation. In most cases, approval from a lending institution might be needed for people looking to develop a property.
In the case of property development, the lender will be looking after the feasibility of the project, ensuring that the development team have allowed for contingencies. As financing a single home is different from financing the whole project, the risk for the bank is also higher in funding a development and hence they want to make sure that a professional and carefully planned approach has been implemented in the project.
In opposition to the worth of the project after completion, lenders also use Loan to Value ratio (LVR) to determine the percentage of funding. In addition to it, most financiers also lend the ongoing interest for the development. For this, the location of the development and history of development in the area, market performance in the area, size and quality of the dwellings also affects the lenders decision.
The Dominion Homes team have a very good experience in property development and can ensure that all documentation required to the finance application is prepared in accordance to the lenders requirement, giving your projects the best chance of getting off the ground. We can also help you keep in touch with the finance brokers with the range of financial solutions.
For more information on financing, please get in touch
It is very common for parties to combine their resources to undertake property developments or acquire income producing properties and these arrangements are often loosely referred to as joint ventures.
Joint Venture is a very attractive option, under the right situation, between the client and the builder and over the last decade, many homeowners have recognised the advantages of redeveloping their existing homes into a duplex or triplex development instead of just renovating, selling and moving.
Potential Investors with appropriate land to develop, lacking the capital to finance the project alone can highly benefit from a joint venture. Dominion Homes can arrange an agreement with the client.
where dominion will deliver the build component for an equity share of the profits based on value of land and cost of build.
– Families who wish to upgrade their homes but have no additional access to finance or are already heavily mortgaged.
– For individuals wishing to downsize or who are planning for retirement but who don’t want to move into a retirement village. This will allow the individual to live independently in the same area.
– For investors wishing to redevelop an existing or a new property but have no idea how to get started or have no time.
Mr X (Client) owns a block of land that is currently worth $400,000 and would like to enter into a joint venture development project to build a triplex. The cost to build each of the 3 units is $200,000.
Land Value (held by the client): $400,000
Build Cost (funded by Dominion Homes): $600,000
Total Project Value: $1,000,000
In this example the build cost is 60% of the total project value and the land component is 40%. So, in this instance Dominion Homes would receive 60% of the revenue and the client (land owner) would take 40%.
At the end of the project each unit sells for $450,000, giving a total revenue of $1,350,000.
Total Revenue: $1,350,000
Dominion Homes Projects: $810,000 (60%)
Client: $540,000 (40%)
The major attraction for the client to go in into a joint venture is the ability to expose the equity in their land with the added security of dealing with a trustworthy builder who has a vested interest in delivering a product that will appeal to buyers.
If you would like more information on entering into a joint venture property development, then we welcome you to
get in touch.
At Dominion Homes, we help you by assisting to get your new home. We can also assist you with Finance, in purchasing you your perfect home. Our homes will be ready to move-in, with all inclusive siteworks, and no hidden costs.
Our own Dominion team will assist you in navigating the process from start to finish.
If you do not know what is included in the price, building your dream home can be stressful very quick. It is builder’s responsibility to advertise clearly, what is included in the turnkey, which means you can turn the key once the building process is completed and start living. Dominion Homes are specialised in handing over a completed product that you simply have to “turn the key” and move in.
When we say everything is included, we mean it. All our homes are ‘turnkey’ fixed price packages, that makes it clear that you do not have to pay more to start living.
Dominion Homes understands that every individual are so busy in their everyday lives that we will take all the hassle out to build for you. For more information about what is included in our home packages, email us at: info@dominionhomes.com.au
Wheather you’re a first timer or an experienced developer Let us help you with advice and expertise.
Get in touch and we can help get started with a feasibility & risk assesment, block yield calculations and a buyer demand analysis.
Phone us on: 08 8447 6741