A tweak in the schedule is worth two in the bank

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So you’ve just received your DA & CC consent and it’s almost time to start building.  Just how long will the construction phase of your development take? Or more importantly, the question is how long before you start making a return on your investment?  I guess this is like asking, how long’s a piece of string?  Because the answer will depend on many factors;
  • The number of dwellings you are building – single house or multi unit development?
  • The type of construction process; slab and brick, timber floor and walls, partially prefabricated materials etc  
  • The size and degree of difficulty of the structures.
  • The weather; how many rainy days will delay progress? 
  • Material and contractor availability.
  • The builder’s ability to manage his contractors – his relationship with his trades and communication skills.
  • The knowledge and experience of those managing the project.
  • Any issues that may arise during the development process i.e. hitting rock when excavating.
Generally speaking, the build phases on Property Bloom projects range from a dual occupancy being completed within four months to a four villa project being completed in six months.  Our granny flat developments are only two months from receipt of approval to completion of building works.
Now you have an idea on how to estimate your build time...is there a way you can save on holding costs too?  The answer is yes and it’s all about analysing your building drawdown schedule.  A simple revision to a builder’s drawdown schedule can end up saving a considerable amount of money in interest holding costs.
Typically, my builder’s drawdown schedule would go something like this for a dual occupancy development....
  • Deposit – $5,000 due when signing the tender (before DA is lodged)
  • Slab Less deposit paid – 20%
  • Frame & Trusses – 20%
  •  Lock up – 25%
  • Mould out – 25%
  • Completion – 10%

By requesting a change of just a few percentages over each phase we can save thousands of dollars for our clients.  This was our proposed change to the schedule:
Deposit – $5,000 due when signing the tender (before DA is lodged)
  • Slab Less deposit paid – 15%
  • Frame & Trusses – 20%
  •  Lock up – 20%
  • Mould out – 25%
  • Completion – 20%

This is a much better schedule for our clients as there is more to be paid towards the end of the build.  Not only does this save on interest costs, but it keeps the builder ‘in the game’ as there is more for him due at the back end of the build. 

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Jo Chivers

“I was bitten by the property bug, there was no turning back.”

Jo Chivers proves that women can indeed have it all- a career that you are passionate about and a family.  While all of this sounds great, it does require hard work, dedication, perseverance and a bit of risk-taking.

Jo’s love of property development inspired her to leave her corporate career and pursue her true passion. After educating herself in property investing, she started building up her own property portfolio. After purchasing a few blue chip properties in Sydney, she soon realised how negatively geared they were and began researching outside of Sydney. She discovered a more affordable, large region of NSW where she completed her first property development.  Soon her friends were asking her to find them sites and manage their developments. 

She realised there was a need for an all encompassing project management service and her business Property Bloom™ was born.  Ten years down the track, she has developed over 60 properties for clients, creating literally hundreds of thousands of dollars in equity and high end yields.


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