Hi everyone, i may have hit a hurdle here and would love your input.
I am currently looking at a buying a new IP in regional NSW. I own 2 properties (1 x oo, 1 x ip) and this would be my 3rd. I have never done a subdivision or DA before but want to get started and this will (hopefully) be the first of many.
The site is a corner block, sloping towards the street so no issues with easements. It is about 870sq/m in a rectangular shape with an existing 2 bed 1 bath house (approx 80 yrs old) on the front corner leaving a great big backyard.
The interior has not been updated in anout 40yrs so is well and truely ready for a reno. My plan is to install new kitchen, new bathroom vanity, give it a lick of paint and some new carpet, but otherwise just repair jobs, nothing major/structural. I have completed a reno similar to this before and estimate it will cost about 10-15k (doing all the work myself). once the reno is complete, i should be able to rent it out for about $200/w. Its not a great rental return, being $200/w on a total cost of $220k (purch price and reno and thats not including stamp duty etc) but the potential for the DA will more than make up for that.
i have already paid a local town planner to assess the site and do a little research for me based on keeping the existing dwelling and sub dividing the backyard.
He has said i should be able to fit two 2 bedroom duplex on the back block, but we have not discussed what could be done if we demolish the existing dwelling.
the reason i never asked about that scenario is that i think i will only have enough finance to complete the two new buildings, not the demolition and construction of another 1 or 2 more. My gut feeling though is that if it were demolished, i could fit 4 units/townhouses on it.
i have recieved back my building and pest inspections. Pest inspection: no problems.
building inspection: some concerns.
View attachment summary.doc
i have attached a summary of the parts of the building report im a bit worried about. I think that the shed (which is very small) could either stay but the tennant wouldnt be able to use it, or i would get it removed BUT it is made partially of asbestos
i have not had any dealings with removing asbestos before, is it costly? or should i just leave the shed where it is?
also, there is some rotting to some of the exterior walls mostly around the base of the building, but it doesnt seem too bad.
the roof would require a repair, but im not sure how badly or how much that would cost.
I believe it is a great site with potential (5 blocks from the CBD, in a good area, flat land, easy to work on, lots of other subdivision going on in the same area) but what im trying to decide atm is this:
do i go ahead and repair the current place plus then attempt my first subdivision followed by building a duplex? (original plan)
or
do i, based on the new info from the building report, (which painted a worse picture than i thought) try to do some sort of joint venture as i dont have the funds to demolish the lot and build 3-4 units/ try to pass it off to a developer that can and ask for a finders fee/ some other idea?
lastly, to help round out the picture, my finance position is that i have 95k in a LOC, the purch price has been negotiated down to 206k (from 240k) but i dont have a high income so my main restriction is going to be the income barrier.
any questions, please fire away as im an open book, otherwise, have at it with your hints, tips, advice or general comments.
regards
greg
I am currently looking at a buying a new IP in regional NSW. I own 2 properties (1 x oo, 1 x ip) and this would be my 3rd. I have never done a subdivision or DA before but want to get started and this will (hopefully) be the first of many.
The site is a corner block, sloping towards the street so no issues with easements. It is about 870sq/m in a rectangular shape with an existing 2 bed 1 bath house (approx 80 yrs old) on the front corner leaving a great big backyard.
The interior has not been updated in anout 40yrs so is well and truely ready for a reno. My plan is to install new kitchen, new bathroom vanity, give it a lick of paint and some new carpet, but otherwise just repair jobs, nothing major/structural. I have completed a reno similar to this before and estimate it will cost about 10-15k (doing all the work myself). once the reno is complete, i should be able to rent it out for about $200/w. Its not a great rental return, being $200/w on a total cost of $220k (purch price and reno and thats not including stamp duty etc) but the potential for the DA will more than make up for that.
i have already paid a local town planner to assess the site and do a little research for me based on keeping the existing dwelling and sub dividing the backyard.
He has said i should be able to fit two 2 bedroom duplex on the back block, but we have not discussed what could be done if we demolish the existing dwelling.
the reason i never asked about that scenario is that i think i will only have enough finance to complete the two new buildings, not the demolition and construction of another 1 or 2 more. My gut feeling though is that if it were demolished, i could fit 4 units/townhouses on it.
i have recieved back my building and pest inspections. Pest inspection: no problems.
building inspection: some concerns.
View attachment summary.doc
i have attached a summary of the parts of the building report im a bit worried about. I think that the shed (which is very small) could either stay but the tennant wouldnt be able to use it, or i would get it removed BUT it is made partially of asbestos
i have not had any dealings with removing asbestos before, is it costly? or should i just leave the shed where it is?
also, there is some rotting to some of the exterior walls mostly around the base of the building, but it doesnt seem too bad.
the roof would require a repair, but im not sure how badly or how much that would cost.
I believe it is a great site with potential (5 blocks from the CBD, in a good area, flat land, easy to work on, lots of other subdivision going on in the same area) but what im trying to decide atm is this:
do i go ahead and repair the current place plus then attempt my first subdivision followed by building a duplex? (original plan)
or
do i, based on the new info from the building report, (which painted a worse picture than i thought) try to do some sort of joint venture as i dont have the funds to demolish the lot and build 3-4 units/ try to pass it off to a developer that can and ask for a finders fee/ some other idea?
lastly, to help round out the picture, my finance position is that i have 95k in a LOC, the purch price has been negotiated down to 206k (from 240k) but i dont have a high income so my main restriction is going to be the income barrier.
any questions, please fire away as im an open book, otherwise, have at it with your hints, tips, advice or general comments.
regards
greg