A site can look perfect on a listing and still be a trap. Due diligence is the process of checking, thoroughly, that a development site will actually do what you need it to before you are locked in. It is unglamorous, and it is the difference between a smooth project and an expensive lesson.
What due diligence really means
Due diligence is investigating everything that could affect whether, and how, you can develop a site: the planning rules, the physical realities, and the legal fine print. The goal is simple, to make sure there are no surprises after you have committed.
What to actually check
Key checks include zoning and planning controls, access and services (sewer, stormwater, power), easements and covenants on title, contamination history, flood and bushfire overlays, slope and soil, and heritage or character overlays. Two identical-looking blocks across a street can be worth very different amounts once you know these.
Do it before you go unconditional
The time to uncover a problem is while your contract still has a way out. That is why experienced developers do their due diligence during the conditional period, or lock up a site with the right conditions in place. Once a contract goes unconditional, walking away can cost you dearly.
How due diligence protects your feasibility
Every due diligence finding feeds straight into your numbers. A servicing issue, an easement, or a slope that adds to your civil costs can change what the site is worth. Good due diligence is really just making sure your feasibility is built on facts, not assumptions.
Related reading: How Much Money Do You Actually Need to Start Property Development?, Financial Feasibility in Property Development: The Number That Decides Everything
Listen to the full episode
We covered this in episode 192 of the Property Mastermind Podcast. Listen here.
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