How Regulations Affect Profit
Frankly, you build an investment property for a profit. Whether you sell it or keep it in a rental portfolio, you want to avoid costs that don’t give you a return for your hard earned money. However, constant legislation changes ultimately add cost and red tape to a new build. Whether it’s council requirements to contribute towards public art or just the time it takes to get a subdivision approved; it all affects your bottom line
In the short term, these regulations can’t be avoided. To limit their impact means doing your homework. Call the council and find out upfront (before you make an offer on the land) what contributions are required – and get it in writing! The next step is to factor these costs into your feasibility study to find out how they will affect your return on investment.
In the medium term, continue to shine a light on the inconsistencies and over the top regulations that are hindering your investment opportunities. Bring these issues to the attention of those that are in a position to lobby for change; industry bodies, government departments, ministers etc.
In the long term, the more we band together to provide feedback on where the system is failing (and put forward workable alternatives) the better prospects we all have of improving the investor market.