Property development is an exciting and potentially lucrative opportunity.
One of the most common questions new developers ask is: How much money can I actually make?
The answer depends on the type of development you take on, the location, and how well you execute your project.
In this post, we break down the expected profits from different types of property developments and the factors that can influence your bottom line.
What Determines Profitability in Property Development?
Not all property developments generate the same level of profit. Several key factors influence how much you can expect to make:
Type of development – Splitters, subdivisions, duplexes, townhouses, and commercial projects all offer different profit margins.
Location – Property values and demand vary widely between cities, suburbs, and regions.
Market conditions – A strong property market can push up profits, while downturns can reduce returns.
Development costs – Land acquisition, construction, council fees, and finance costs all impact profitability.
Your strategy – Some developers focus on quick turnovers, while others build and hold for long-term gains.
With these factors in mind, let’s explore how different types of property developments typically perform in terms of profit.
Splitters: The Fastest and Simplest Development
A splitter block refers to a property with two separate lots on one title. The process involves legally separating them so they can be sold individually.
Estimated profit: $100,000 – $120,000
Timeframe: As fast as 30 days, typically under 3 months
Complexity: Low
Since most of the subdivision work is already done, splitters are a great way for new developers to get started. However, because they are relatively easy, the profit margins are lower compared to more complex developments.
Subdivisions: More Work, Higher Profit
A subdivision involves dividing a single lot into two or more new lots, often requiring additional work such as installing services and obtaining council approvals.
Estimated profit: $150,000 – $160,000 (for a simple two-lot subdivision)
Timeframe: 6-12 months
Complexity: Moderate
Subdivisions require more work than splitters, but they also provide higher profits. If the land allows for more than two lots, the profitability can increase significantly.
Duplex Developments: Double the Opportunity
Building a duplex involves constructing two homes on a single block, which can then be sold separately or kept as investments.
Estimated profit: $450,000 – $600,000 (for mid-range duplexes)
Timeframe: 12-18 months
Complexity: Moderate to high
Duplexes are a popular strategy because they provide flexibility—you can sell one and keep one, sell both, or rent them out for cash flow. The profit margins are higher than splitters and subdivisions, but they require more capital and project management.
Townhouse Developments: Scaling Up for Bigger Profits
Townhouses are multi-unit developments that allow you to build more homes on a single block of land.
Estimated profit:
3 townhouses: $450,000 – $500,000
4 townhouses: $600,000 – $700,000
Timeframe: 18-24 months
Complexity: High
Townhouse developments require larger budgets and longer approval processes, but they offer substantial profit potential. Many developers scale up to townhouses after gaining experience with duplexes or subdivisions.
Commercial & Industrial Developments: Higher Risk, Higher Rewards
Commercial and industrial developments typically involve building warehouses, office spaces, or industrial units. These projects require different financing strategies and attract business buyers rather than residential buyers.
Estimated profit: $2.2 million (for mid-sized industrial development)
Timeframe: 24+ months
Complexity: Very high
Industrial and commercial projects tend to have higher profit margins than residential developments, but they are also considered riskier due to market volatility and financing challenges.
How to Maximise Your Profit in Property Development
Regardless of the type of development you choose, there are ways to maximise your profitability:
Choose the Right Location – Areas with high demand and strong growth potential will always yield better returns.
Run Accurate Feasibility Studies – A project is only as good as its numbers. Ensure your calculations are realistic.
Build the Right Team – Work with experienced consultants, builders, and agents to avoid costly mistakes.
Secure Good Finance – The right funding strategy can make a significant difference to your returns.
Plan for the Unexpected – Allow for contingencies in your budget to cover unforeseen costs.
Final Thoughts
Property development offers a range of opportunities, from smaller, safer projects like splitters and subdivisions to larger, high-reward ventures like townhouses and industrial projects. The key to success is education, careful planning, and taking action. If you’re ready to start your journey, make sure you have the right guidance and strategy in place to ensure your success.