How we review developers here at Opes

Here at Opes Partners, we recommend New Build properties to investors.

But, we don’t develop properties ourselves. Instead, we scour the country looking for the best properties that stack up as good investments.

 This means we talk to hundreds of developers every year and, because of this, people are always asking us: “What do you think of X,Y, Z developers?”

That’s why we often provide reviews of developers; we’re giving you ideas of what to look for. 

Because we’re not shy about giving our opinions, investors often have questions about how we review these developers. Here’s how we approach it. 

Aren’t you biased … because you earn money from developers?

It’s really important to understand that here at Opes we make money by recommending properties to investors. 

So, if you work with us and buy a property through a developer, they’ll pay us a flat fee.

So, you might be wondering: “Hold on, what if you just give glowing reviews to developers who pay your fee … and negative ones to those who don’t want to pay?”

It’s a fair question, so here’s how we address that potential bias.

1. We charge a flat fee for every developer. No developer can ever incentivise us (or our team) to recommend them; we don’t let them pay us more. We once had a developer who offered to pay us double our usual fee, but we didn’t like their properties as investments, so we said ‘no’. We didn’t recommend them.
2. We are transparent. We want to be transparent about our processes and any biases we might have. That’s why we openly discuss these topics so you can make your own informed decisions.

More from Opes:

• How do you know if a developer is any good (or not)? (Article)
• The developers Opes recommends (and the ones we don't) (Article)
• Top 6 property developers in New Zealand (Article)

How do we review developers? 

There are several factors we look at when we provide public reviews on developers. Here are the main questions we ask ourselves:

#1 – Where do they build?

This is the most critical factor. We ask ourselves: Are they building in the right areas?

At Opes, we firmly believe that location matters more than the property itself. Even the best property won’t perform as an investment if it’s in the wrong spot.

So we look at where the developers build and if it matches up with our recommended areas.

#2 – Do they build appropriate investment properties?

You can build a really nice property, but that doesn’t make it a good investment.

It’s not just about how the developer builds the property, it’s also about price. For example, are their properties reasonably priced, or is the developer charging too much for an investment?

Some developers price themselves out of the market. For instance, Landmark Homes isn’t a company we recommend. They build high-spec, expensive houses. Data from BCI supports they are a premium option, and from what we hear they do a good job.

So if you want to build your dream home … Landmark could be a good fit, but their properties wouldn’t be right for a property investor.  

As well as looking at locations, we look at developer data to understand what makes each developer different. 

#3 – Are the properties rent-ready?

Another factor we look at is whether the developers build Rent-Ready homes. 

A “Rent-Ready” property is one a tenant can move into from day one. 

But sometimes developers will quote a price … and that price won’t include all the costs. 

For instance, if you do a progressive payment build, you pay for the property as it’s built. This often comes with extra costs from the bank (interest). And the properties often don’t include curtains, landscaping, and a lot of other things you need.

Some developers, like Golden Homes in Canterbury, focus primarily on progressive builds. 

That’s fine for some buyers … but it doesn’t align with what many of our investors need. So we will often clarify and point this out when we’re doing reviews.

#4 – What does the data say?

Every developer says they are different. Every developer says they are the best. 

Here at Opes, we’re more interested in the data. So as part of our new Developer Database we also look at: 

1. Age of developer – How long they’ve been building. Do they have a long-standing reputation?
2. Build cost – How their pricing compares to the market. Are they expensive?
3. Company size – How many properties they build per year. Are they big or small?
4. Property sizes – Are the properties bigger or smaller, on average?

You can then see these metrics in the Developer Database. This gives you a clear picture of how a developer stacks up against industry averages.

For example, a younger developer might be newer to the game, but that doesn’t necessarily mean they’re less reliable than a 10-year veteran. It’s just another factor to weigh in your decision-making process.

We share this data so you can make your own informed choices. That can help you make the decision on who you want to approach.

Should I trust these developers?

It’s our job to evaluate whether any developer we recommend is reputable and is going to do right by our investors.

Our reputation is also on the line. We’re proud of our track record in steering investors away from problematic developers.

For instance, we long advised against working with DuVal, even before they faced public scrutiny. We’ve also avoided Reid Myers and Titus, based on early concerns.

Unfortunately, we sometimes hear: “I wish I’d known you didn’t recommend them beforehand.”

Ultimately, yes, we do have economic incentives and we could temporarily make more money if we told you X developer is good, or Y developer is bad. But, if we did that, over the long term we’d lose trust. And if you think “Opes isn’t here for me. They’re here for themselves” then our business isn’t going to be around for long. 

Yes, there’s always a chance for bias, but here’s the thing: People ask us for our honest opinions about developers, and we give them.

We believe it’s better to share our insights and let you decide for yourself.

At the end of the day, you’re in the driver’s seat. Our goal is to provide the information you need to make confident decisions about who you want to work with.