Hi all,
New to this forum, long time lurker! Young and interested in taking the plunge into investment properties and have an opportunity to test the waters so to speak. My old man (and us) have been sitting on an old weatherboard home that we used to lease out until certain personal circumstances dictated that we were to move into this home as a PPOR. As such, we have extensively renovated the interior to make it liveable so to speak.
The clincher is that this property in SE Melbourne, bought for around $75k 10 years ago, has increased massively in value to at least $650-700k (based on comparable sales) due to the size of the land - nearly 1000m^2. However, this space is currently not doing a huge deal and is, in fact, a pain in the **** to mow!
So we are looking to build a medium-high density unit development. We engaged a mob called Brutal Art to do an initial assessment of the site, and they suggested that we could either build 2x 2BR units and 1x 1BR unit OR 4x 1BR units at comparable cost ($400k + 20% contingency, excluding external and design fees)
Question 1: As we intend to lease the properties out (i.e., own all the properties), which will be the most profitable / less risky (in terms of vacancy) move given that it will be probably be positively geared for a while (land is fully paid)?
Question 2: Should we be engaging an architect or a draftsman for this work, given that it's not the world's simplest town planning proposal? As I understand, architects are more expensive (Brutal Art have suggested approximately $30,000 as their fee, end-to-end)? Given that costs are a consideration in this kind of venture, would it be better to engage a cheaper service?
Question 3: If the latter, can anyone recommend a draftsman who would be familiar with the Greater Dandenong council and their local planning schemes?
Question 4: As we intend to hold onto this property, do we need to create a owner's corporation (consisting solely of us)? If so, are there any special things to consider when creating this?
Question 5: Self-manage the property or get an agent to do it, given that we'll be living on the same lot for some time?
After this is all done, we'll have 4 IPs and stick to a 'build and hold' strategy and acquire more land/IPs to (hopefully) rapidly build a sizable portfolio.
Asides from the questions above, can anyone give me any further advice or gotchas that you'd like to share with a young (and reckless?) property developer wannabe like myself?
New to this forum, long time lurker! Young and interested in taking the plunge into investment properties and have an opportunity to test the waters so to speak. My old man (and us) have been sitting on an old weatherboard home that we used to lease out until certain personal circumstances dictated that we were to move into this home as a PPOR. As such, we have extensively renovated the interior to make it liveable so to speak.
The clincher is that this property in SE Melbourne, bought for around $75k 10 years ago, has increased massively in value to at least $650-700k (based on comparable sales) due to the size of the land - nearly 1000m^2. However, this space is currently not doing a huge deal and is, in fact, a pain in the **** to mow!
So we are looking to build a medium-high density unit development. We engaged a mob called Brutal Art to do an initial assessment of the site, and they suggested that we could either build 2x 2BR units and 1x 1BR unit OR 4x 1BR units at comparable cost ($400k + 20% contingency, excluding external and design fees)
Question 1: As we intend to lease the properties out (i.e., own all the properties), which will be the most profitable / less risky (in terms of vacancy) move given that it will be probably be positively geared for a while (land is fully paid)?
Question 2: Should we be engaging an architect or a draftsman for this work, given that it's not the world's simplest town planning proposal? As I understand, architects are more expensive (Brutal Art have suggested approximately $30,000 as their fee, end-to-end)? Given that costs are a consideration in this kind of venture, would it be better to engage a cheaper service?
Question 3: If the latter, can anyone recommend a draftsman who would be familiar with the Greater Dandenong council and their local planning schemes?
Question 4: As we intend to hold onto this property, do we need to create a owner's corporation (consisting solely of us)? If so, are there any special things to consider when creating this?
Question 5: Self-manage the property or get an agent to do it, given that we'll be living on the same lot for some time?
After this is all done, we'll have 4 IPs and stick to a 'build and hold' strategy and acquire more land/IPs to (hopefully) rapidly build a sizable portfolio.
Asides from the questions above, can anyone give me any further advice or gotchas that you'd like to share with a young (and reckless?) property developer wannabe like myself?
