Just bought a development site in Sydney!
- Thread starter MichaelW
- Start date
Firstly good luck with your project
Secondly good luck with Pittwater Council
Just a bit of a caution when it comes to working out your potential building yield.
Corner sites you tend to waste potential building space on the setbacks from the street. You will find one frontage will have much less setback than the other, but adjoining properties will influence how this is considered in the DA.
For built-upon area calcs include all hard surfaces, ie driveways, paths, paving in courtyards, etc as well as building footprint.
What is the allowable zoning floor space ratio. FSR includes each levels gross floor area but not garages or verandahs.
Does the land drain towards either street?
If the land size is 20m by 34m you might only fit two dwellings.
Secondly good luck with Pittwater Council
Just a bit of a caution when it comes to working out your potential building yield.
Corner sites you tend to waste potential building space on the setbacks from the street. You will find one frontage will have much less setback than the other, but adjoining properties will influence how this is considered in the DA.
For built-upon area calcs include all hard surfaces, ie driveways, paths, paving in courtyards, etc as well as building footprint.
What is the allowable zoning floor space ratio. FSR includes each levels gross floor area but not garages or verandahs.
Does the land drain towards either street?
If the land size is 20m by 34m you might only fit two dwellings.
Hi All
Just a note on Michael’s block for those interested from a designers perspective.
Firstly, it is very unusual being almost a true triangle.
It is the corner of two interesting roads at an angle. So, two sides are road and one side neighbour. Correct call about setbacks being important.
POSITIVE
It falls strongly to one frontage which thankfully is also north to north west. As such it has good solar access and views all round.
It has most of the established trees on the boundary so landscaping should be impressive when finished.
It is fully fenced all round so good for security.
Nearby they have built underground so it must be relatively stable and easy to do.
NEGATIVE
Being on traffic lights noise will be issue to address but it is only local traffic.
Probably vehicles only accessible from the high street and only from the lane adjacent as crossing divider would be too close to the traffic lights.
Little room for construction materials.
Just a first up comment from inside his car as we drove by.
Peter 147
Just a note on Michael’s block for those interested from a designers perspective.
Firstly, it is very unusual being almost a true triangle.
It is the corner of two interesting roads at an angle. So, two sides are road and one side neighbour. Correct call about setbacks being important.
POSITIVE
It falls strongly to one frontage which thankfully is also north to north west. As such it has good solar access and views all round.
It has most of the established trees on the boundary so landscaping should be impressive when finished.
It is fully fenced all round so good for security.
Nearby they have built underground so it must be relatively stable and easy to do.
NEGATIVE
Being on traffic lights noise will be issue to address but it is only local traffic.
Probably vehicles only accessible from the high street and only from the lane adjacent as crossing divider would be too close to the traffic lights.
Little room for construction materials.
Just a first up comment from inside his car as we drove by.
Peter 147
MrB,MrB said:
Yeah, I know where you're coming from with Pittwater council. Well, at least my wife is a lawyer and used to work at the Land and Environment Court and knows all the commissioners there well. So, if worse comes to worse, she'll self represent us to a commissioner for a ruling. No skin lost. But, we've already touched base with council and they sound pretty amenable to our plans so long as we fit within their numerical constraints.
I've attached a picture of the site for those interested.
MarkP, I can't even start developing it for 12 months as I'm locked into a 12 month lease with the vendor. That was part of the negotiations that I came up with in order to seal the deal. They get a 12 month lease on a reduced rent and I get the property for $80K less than they were originally asking. Sounds fair enough to me.
Cheers,
Michael.
PS Skater, welcome back!
Attachments
hi mike,
i would lodge the D.A asap..councils do love to take their time even tho you might fully comply..you probably will find that you will get objections from your neighbours as people in yuppie suburbs do not like development fullstop.
if worse comes to worse it goes to the council meeting (if you have received..i think its 5 or 6 objections) then it becomes political..thats another thread in itself..you have to speak to your local councillors..especially the one representing your ward..
but with your design..do not give in to what the town planner sees as being compatibile with the surrounds..take it on board and see if you agree with what he is saying..BUT it is your vision, your baby..your project..your 1st develepment..so dig your heels in..if you wear heels that is
after yuur first is done..you will always look back the same way as the first time you did you know what
i would lodge the D.A asap..councils do love to take their time even tho you might fully comply..you probably will find that you will get objections from your neighbours as people in yuppie suburbs do not like development fullstop.
if worse comes to worse it goes to the council meeting (if you have received..i think its 5 or 6 objections) then it becomes political..thats another thread in itself..you have to speak to your local councillors..especially the one representing your ward..
but with your design..do not give in to what the town planner sees as being compatibile with the surrounds..take it on board and see if you agree with what he is saying..BUT it is your vision, your baby..your project..your 1st develepment..so dig your heels in..if you wear heels that is
after yuur first is done..you will always look back the same way as the first time you did you know what
Hi Michael
Congrats on the purchase & good luck
I am just starting to look around for a development site but find my self spending too much time on Domain just looking at lots of potential sites but then find my self wondering wher to go from there.
If its possible could you list the process you have gone through (education wise ... not formal) to reach the point you are now at?
in other words what did you learn and have to learn to acheive this goal?
Thanks
Greg
Congrats on the purchase & good luck
I am just starting to look around for a development site but find my self spending too much time on Domain just looking at lots of potential sites but then find my self wondering wher to go from there.
If its possible could you list the process you have gone through (education wise ... not formal) to reach the point you are now at?
in other words what did you learn and have to learn to acheive this goal?
Thanks
Greg
Greg,Grego said:
More than hapy to do so. It may not help you in your situation, but who knows...
For me its been an 18 month learning process where my buy and hold for capital gain strategy evolved to a buy and develop and hold for capital gain. Let me break it down a bit:
1. I started off looking at buying below market in a likely growth area. I wasn't interested in adding value but thought if I buy well I'll do well. That's where I took the flight up to Bris-Vegas and identified a decent property up there at a good price and yield with long term CG potential. In retrospect I realised I could do better so I pulled out of that one and refined my strategy.
2. I then started looking for a reno in my local area. I decided to become the "local expert" and this was a great bit of advice predominately from TheFirstBruce that I took on board. I know my area well so can actively work this area and identify value quickly. I considered buying a cottage on 450m2 for about $550K and renoing it and holding it. The market moved and there was a lot of first home buyers in this space that pushed prices too high. They started asking $600K for dumps on a postage stamp so I stepped back and refined my strategy further.
3. I now started thinking duplex. I went to my local government website and realised that they had an interactive mapping function online which showed the zoning for every house in the Pittwater council area. There is a concentration of Area3 duplex sites near where I live that I took an interest in. I figured if I could buy cheaply, or at a marginal increment on the dumps on postage stamps, then I'd be doing well. I could then knock down and duplex, or even add an attached duplex dwelling to the existing building. I went to offer and almost got a place which met this criteria on 650m2 for $640K. Long story, but I missed it because the vendor preferred the other bidder as they were first in with an offer. I continued to pursue this strategy but started searching on all the real estate websites for anything with 600m2 minimum land, then plugging the address into the Pittwater mapping service and checking its zoning. A few popped up with duplex zoning but were a bit steep. Just kept plodding along then got a lucky break.
4. I spotted this house and land site on homehound.com (a less publicised and accessed realestate website) but it was out of reach. It was advertised at Offers above $770K. So I rang the guy up and had a chat and expressed an interest. I did my maths in advance thanks to some assistance from JoannaK and calculated my residual land value. i.e. How much the land was worth to me allowing for my development costs and a suitable profit margin buffer. I came up with about $750K odd but told the agent I'd come up with $700K. He said way too low so I just stepped back for a while. I realised the market at this price point was tight as most people couldn't afford much above $600K. It was an old house and the developers weren't my competition it was all first home buyers who could do much better for $770K. I waited and waited some more. He then re-listed it as Low 700's and came back to me and said $720K would get it. I said $680K and he said no way but passed the offer on to the vendor. They baulked so I waited some more. Eventually he rang me up and said $700K would get it and that was their rock bottom price. I offered $690K plus $10K back by way of a 12 month lease at $200pw below market rent. They accepted. This way I pay stamp duty on $690K and I get half the $10K loss on rent back through tax deductions on the negative gearing. Deal was done.
So, in summary I guess it was an evolutionary process, but the key point came when I decided to become the local expert. I strongly suggest you limit your target postcodes and focus rigorously and extensively in those areas in isolation. I was also helped by pre-approved finance and a willingness to move quickly. They knew I was serious which is why the agent kept ringing ME back and not the other "maybe" buyers on the sidelines. I was also aided by my few near misses as I knew this was good value relative the other stuff selling in my postcode. Why pay $600K for a crapbox on 400m2 when you can pay $690K for a multi-unit zoned site with a decent house on it?
Hope that helps a bit with your own pursuits.
All the best,
Michael.
PS The agent is on his way over to my workplace right now to pick up the bank cheque for the balance of the 10% deposit, so I'll be locked into the contract in the next few hours. My conveyancor negotiated a few minor changes to the contract including removal of a clause allowing release of the deposit before settlement. Very dodgy option, allowing them to spend the money before its settled. My wife Kay said she'd seen far too many court cases where this had happened and the buyer was struggling in vain to get their deposit back when a contract fell over.
Greg,
I agree. Another benefit of buying local is that, when you come to develop it, you'll be more readily able to project manage it. You'll also be able to get in to council regularly and know the local tradesmen etc etc. I couldn't imagine trying to do a remote development successfully, but that might just be my personal inexperience. Once you've got a good team around you then remoteness might not be such a big issue.
Good luck,
Michael.
I agree. Another benefit of buying local is that, when you come to develop it, you'll be more readily able to project manage it. You'll also be able to get in to council regularly and know the local tradesmen etc etc. I couldn't imagine trying to do a remote development successfully, but that might just be my personal inexperience. Once you've got a good team around you then remoteness might not be such a big issue.
Good luck,
Michael.
Thanks for the update Michael. I agree with being a local expert and this works for you, but many people simply cannot afford to be local experts.
I know where I live like the back of my hand (Sutherland Shire) as I've lived here all my life. (Alfords Point, Caringbah, Bangor and now Menai) I know the bad spots and good, what prices are reasonable and what are the rip offs. But there is no way I could afford anything here, as pretty much anything decent goes for 550k + and even units fetch at least 320K with 2.5% returns. Not good investing.
Just stating that being a local expert is good, but not viable for many, especially in Sydney.
Thoughts?
I know where I live like the back of my hand (Sutherland Shire) as I've lived here all my life. (Alfords Point, Caringbah, Bangor and now Menai) I know the bad spots and good, what prices are reasonable and what are the rip offs. But there is no way I could afford anything here, as pretty much anything decent goes for 550k + and even units fetch at least 320K with 2.5% returns. Not good investing.
Just stating that being a local expert is good, but not viable for many, especially in Sydney.
Thoughts?
RJ I live in the eastern burbs & it is well out of reach for me as well, However I can still become a local expert in someone elses backyard. I can jump on the M5 or M4 and be in western sydney in under an hour (out of peak hrs of course)
I am presently looking in Western Sydney where there are developable blocks for around the $250K mark . I'm not saying they are good or bad buys just that they are correctly zoned and big enough.
Regards
Greg
totally agree - a couple of times i had to clarify things with the builder on our last project, and have certain things recified/changed as per our contract such as fly screens not being installed, rendering stopping 10inches from the ground etc all before handover time. if i had not been local then i wouldn't have seen these things until to late.MichaelWhyte said:
congrats!
I'm just going to join the party and send my congrats to Mike as well. 18 months planning is a long time to hatch a big baby, but it sounds like it's going to be well worth it!
I'm looking forward to the continued blow-by-blow. Thanks for putting this all up online! What a great contribution!
Jireh
I'm just going to join the party and send my congrats to Mike as well. 18 months planning is a long time to hatch a big baby, but it sounds like it's going to be well worth it!
I'm looking forward to the continued blow-by-blow. Thanks for putting this all up online! What a great contribution!
Jireh
Michael, congratulations on your purchase ! I look forward to reading up on details as you learn and move along.
One question. Once you do start to build ( I realise you need to wait for lease to be up ) how long do you think the building process will take ?
Thanks !
One question. Once you do start to build ( I realise you need to wait for lease to be up ) how long do you think the building process will take ?
Thanks !
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