Basic Subdivision

[CHAOS]

I have not had much luck using the search function - prob user error.

Anyway considering purchasing next IP

Corner block 1000sqm
Retain front house
Sell back block
Keep or sell house ? undecided

I know to check with council and water board to ensure subdivision can occur.

Do I take the hassle out of it and pay a local company to do the subdivision and council process on my behalf from start to finish (so my attention can be on my family)

How much $ can be saved if DIY - or is it not worth the stress.


Subdivide and sell asap
or
Subdivide, then sell after held for 12mths.

What $ cost is there between scenarios? Is one generally better than the other?

Does anyone have a subdivision checklist - for working out the feasibility?

 

[Chomp]

If you can afford to hold the front house and go again then why sell ?

 

[CHAOS]

Thanks Chomp.

Yes will be able to afford to keep front house.

 

[PRO Victoria]

With regards to the professional fees I would advise to get in contact with a number a town planners/surveyors for a quote as the prices can often vary substantially. Also take into consideration whether the quote includes responding to information requests and any other additional information the local Council may ask for as this can quite often increase the final fee. They should also be able to inform you of the chances of approval and if they have had any similar applications approved recently.

Obviously a surveyor will need to be involved to prepare the plan of subdivision and they may be able to handle the planning permit/subdivision application as well.


From this you will need to determine if the cost of the professional fees outweighs the time and possible stress of submitting the application to Council yourself and the loss of family time. I have had a number of experiences where clients have attempted the DIY route only to have the Council come back and require further information or deem they're application incomplete and then they decide to hand it over to a professional to complete as they no longer have the time/patience/knowledge to handle themselves.

Your local council may outline a subdivision process on their website. The Stonnington City Council in Melbourne has a Subdivision Q and A document that can be useful, presuming the property is in Victoria. The document is available on the right hand side of the link below. Alternatively, town planners/surveyors will be able to outline the process for you when you ask for some quotes.

http://www.stonnington.vic.gov.au/r...tion-sheets/subdivision-all-you-need-to-know/

Hope this helps, if you have any other questions please let me know.

 

[CHAOS]

Thanks Pro Vic

We inspected the property today.

Concerns are the front house. It is lined with asbestos internally and needs re-stumping, new iron roof down the track.(kitchen too). Having tackled a reno of this size last year we are not up for the task.

Option B of course is to paint and present well, make the kitchen nice and sell. Concern is who would buy a house lined with asbestos?

Option C - just rent it. On purchase price for the lot it would return 5% - we will be left with the same issues asbestos down the track.

Knock down and rebuild -I don't think enough profit in that. And not sure of councils attitude to that.

The asking price is 270+ The house is rentable - but average standard. Plus a mountain of garden to tame (remove)

Property a couple of houses away same size block with house on it (could be saved but needed a lot of work and was not in rentable condition) sold for 190k 3mths ago.

I think 270 is overpriced. With the condition of the house I would say 240-250 max. But still not sure if worth the headaches. And I have never offered 10% less than asking price -

For those of you who have a subdivision under your belt - any comments

 

[sprightly]

Hi,

Asbestos is almost every where for houses in the 80s and as long as u don't disturb it then is fine.
It all comes down to numbers.

Work it out and see what works for u.

 

[rmoloney]

Depending where this is it is going to cost you up to $100k to subdivide the land.

DA ($10-15k), Council Contributions ($26k), Headworks ($50k)

If your only buying at $270k, what is new land valued in the area?

If new land is say $150k and you believe you can get $270 for the house on the reduced lot size, then on paper you have made a $50k equity gain.

But then take into consideration hold costs for the year it takes (say $200k loan) = -$13K. Then take off sales fees -$3k,

Left with a Gross of only $34k. Then take out any reno costs etc too.

DBYD website is free for underground services checks www.1100.com.au to check all your sewer, water power etc. you want them close
Block will need to generally slope towards street also to be able to discharge stormwater.

 

[CHAOS]

Thanks rmoloney - appreciate your input and the link.

The land would sell at 140-160k
I thought the holding costs would be reduced by renting the front house out.

I asked a local company for an approx. price guide to hire them to do the subdivision on our behalf.
-Their fees (survey, planning application, documentation) 5k
-Sewer, Power & Water and adequate drainage needed - if readily available would only mean connection costs to the second lot.
5k
-Council Fees 1k
-& Titles 2k

Adds up to 13k. I can see this being on the lean side. I had guessed 45k. But it is also a long way from the 100k mark.

I think I need to ask them some more questions re council contributions etc.

This block can be split into 3 if I was game. Can this be done in a staged process. Chop the yard, sell off. Then dump the house and build 2 on the remaining / subdivide. The neighbor subdivided and put 2 units in the back and subdivided into 3 lots. Another close property just got approved for 3 lot sub.

 

[westminster]

What state is the block in?

If its nsw they seems to be more expensive as they have more council contributions, in vic there is also a open space levy ( I think that is what it is called)

 

[Nash13]

Assuming the block is in vic the figures you have had quoted to you look on face value to be very lean. The most likely reason for this would be an omission of a number of costs associated with achieving your statement of compliance for the subdivision (i.e. meeting the conditions on your planning permit). The consulting fees also look lean, is there a catch?

The likely conditions imposed on a 2 lot sub will vary depending on zone, council and existing infrastructure.

As a general rule from conception to completion a 2 lot sub often ranges from 25-35 k per lot. Sounds like some further investigation might be needed!

 

[CHAOS]

Its in regional Vic.

I made an offer that was not accepted. I am ok with that as there is still a lot more I need to find out before taking the leap.

 

[Nash13]

What state is the block in?

If its nsw they seems to be more expensive as they have more council contributions, in vic there is also a open space levy ( I think that is what it is called)

Public open space contribution... Generally waived when undertaking a 2 lot sub, otherwise charged at up to 5% of unimproved site value

 

[CHAOS]

Assuming the block is in vic the figures you have had quoted to you look on face value to be very lean. The most likely reason for this would be an omission of a number of costs associated with achieving your statement of compliance for the subdivision (i.e. meeting the conditions on your planning permit). The consulting fees also look lean, is there a catch?

The likely conditions imposed on a 2 lot sub will vary depending on zone, council and existing infrastructure.

As a general rule from conception to completion a 2 lot sub often ranges from 25-35 k per lot. Sounds like some further investigation might be needed!

Yes Nash - agree.
Perhaps a sales strategy give low numbers. Client buys property and signs up and then you hit them with the real costs. I will give the two other firms I know of a call and see what their feedback is.

 

[allsuccess]

Thanks rmoloney - appreciate your input and the link.

The land would sell at 140-160k
I thought the holding costs would be reduced by renting the front house out.

I asked a local company for an approx. price guide to hire them to do the subdivision on our behalf.
-Their fees (survey, planning application, documentation) 5k
-Sewer, Power & Water and adequate drainage needed - if readily available would only mean connection costs to the second lot.
5k
-Council Fees 1k
-& Titles 2k

Adds up to 13k. I can see this being on the lean side. I had guessed 45k. But it is also a long way from the 100k mark.

I think I need to ask them some more questions re council contributions etc.

This block can be split into 3 if I was game. Can this be done in a staged process. Chop the yard, sell off. Then dump the house and build 2 on the remaining / subdivide. The neighbor subdivided and put 2 units in the back and subdivided into 3 lots. Another close property just got approved for 3 lot sub.

I've also started to investigate on subdivisions (Suburbs in Maroondah Council) and got rough figures around 30-50K mark. The variance is depending on the setup. e.g. I might have to put a carport for the front property to get the subdivision approved etc...