Building cost - Question for Sue78

[soyabean]

Hi Sue,
I understand you have built a number of houses in Bris and also with Tamawood.
For a 200m2 house cost around 135K comfort range, what would the extra estimated cost to a finish state ? (Build to sell/rent not for personal use).
Block is only 400m2 and is in the Richlands/Inala area so I am not after anything luxury and want to keep cost down for FHBs.
I am planning to build 2 and perhaps sell as house/land package so contract can be signed off prior to 30 June for the purchasers to get the 21K grant.

Thanks in advance.

 

[sue78]

unfortunately, Tamawood prices are probably a bit too high now with too many restrictions. The price ends up blowing out even if you have to change the design slightly to suit the scope of the block.

$135k for house
$7k water tank
$10k soil (maybe less but tamawood is on the expensive side but there's no way out of this)
$20k to finish up the house i.e landscape, driveway, carpets etc
$10k miscellaneous (just in case)

when I build my house 5brs, 2 living areas and 2 bath @ 220sqm, the base price was only $97k and they allowed structural changes, minor upgrades (u can't have any upgrades now in comfort) and rendering to the front (not allowed in comfort). Now they force you to pay more of rthe intermediate range eventhough you don't want any of those extras just so you could do minor upgrades that you still have to pay extra for.

It's worth to get a tender from them (cost I think $100) and then compare it to other builders i.e Coral and Hallmark who are also relatively well priced.

I am building a 2 storey atm and Tamawoods 2 storeys are so ugly and pricedthe same as Clarendon. They really have no advantage over other builders now.

I also have a $1k discount letter from Tamawood that you can have if youw ant. Not sure if they will accept it but there's no date and offer is available for me if I ever build another house with them...signed off from MD.

In Inala area if you can do a H+L for around $350k and rent for $450 p/w. It's pretty good but CG won't be much but that doesn't matter anywaysinceproperties over $450k are not moving at all but properties under $420k are selling like hotcakes.

I maybe selling an IP in Forest Lake for $399k so if you can build for $350k for an investment, it would be great.

Goodluck.

 

[soyabean]

Thank you Sue. I have just looked at the Flair series of Hallmark - on special at the moment and looks quite good both floor plan and pricing.
Coral has mainly larger plans not suit my 400m2 blocks.
You are right looks like Tamawood is getting expensive comparing to Hallmark.
I am hoping for a total cost of 300-310K so what you say in encouraging.
Thanks.

 

[Gools]

Soya, did you want to break down your costs a little more for us?
I can't see how you would get it completed for $310k unless the block was really cheap.

Gools

 

[csc]

when building i work on 1200 bucks sq mtr completed with quality fitout......inc carpets, tiles etc..........thats the price you should consider when building...it excludes site work or a crappy soil test result...ball park figures for a quality build. for sure you can build for less but the old saying 'you get what you pay for' holds true in the building game and its noticable when comparing properties especially pc items and the finish...

good luck.

 

[soyabean]

Hi Goosl,
Block 150 K
Build 110K (Flair 181 from Hallmark)
Extra 40K (For other expenses as per Sue 's )
+ 10K (land Stamp duty + interest ) if I calculated correctly it will sell as house/land package before end of June so hopefully not much loan interest to be paid.

 

[Rockstar]

Be careful Soyabean with the contract inclusions. Read them thoroughly. 110k sounds way too cheap for a 180 sqm home. Does it include sitecosts, floor coverings, driveways, etc?

 

[soyabean]

Hi csc,
Thanks and agree with your post about paying for quality. Though my business guess is that, for the area and the potential purchasers I am aiming at, they probably would not mind sacrificing a bit of quality for a lower price, and some may not know the quality when they see it. I don't mean to talk down anyone/groups but that's what's my assumptions are for this particular venture.
I am wondering what areas your developments have been ?
Thanks.

 

[soyabean]

No Rockstar, that is why the 40K extra. I may plan for 50K extra to be safe ?
Have a look at Hallmark website.

 

[Rockstar]

Looks like a good offer my friend. Yes you should plan for 50k extras. Would it be profitable if development costs were 320k?

Think I would go for a seperate oven and cooktop rather than an upright stove. Shouldn't break the budget.

 

[soyabean]

Thanks for the suggestion Rockstar, yes I will go for a seperate oven and cooktop.
For what are selling at the moment, I believe mid 300 is easy to achieve, anything extra is a bonus. If I am lucky people may pay a bit more to make the 30 June FHO grant rush.

 

[atti]

why is it so cheap to built big houses in otherstates compare to Adelaide =\ 92k for bottom of the line 3-2-single garage not even 140 sqm

 

[soyabean]

atti,
I used to be in Adelaide. It was cheaper to build there (and houses are nicer too IMHO) so don't know what's changed. When I first built here in Bris I was shocked at the diff in building cost.
You may be comparing different "class" of builder ? I remember back 10 years or so Fairmont was one of the very popular project home builders over there & reasonably priced.

 

[csc]

Hi csc,
T
I am wondering what areas your developments have been ?
Thanks.

all major coastal regions of qld last 25 yrs, one in nsw at bondi junction, sold in 2007 and currently just settled a block of units in darwin for long term plus just signed a contract in yeppoon qld for a crappy house on a prime piece of land with 180 degree plus ocean views.

im currently about to go and rent for a bit until next year while we decide what to do next....first time renters so will be very interesting.

build to your budget of course..each to their own..when i build no matter where it is i alwys try and add some unique touches that are a little different but not costly even if its just quality trim or a nice door and tiles...they are cheap as really.

good luck with the project.

 

[gazza]

why is it so cheap to built big houses in otherstates compare to Adelaide =\ 92k for bottom of the line 3-2-single garage not even 140 sqm

you should try building in Canberra. prices here are unbelievable compared to interstate (so are land prices). builders seem to be able to charge what they like. same goes for swimming pools.

 

[soyabean]

no matter where it is i alwys try and add some unique touches that are a little different but not costly even if its just quality trim or a nice door and tiles...they are cheap as really.

I agree, absolutely ! Thanks csc.

 

[sue78]

No Rockstar, that is why the 40K extra. I may plan for 50K extra to be safe ?
Have a look at Hallmark website.

You wouldn't be able to finish the house on $20k if you didn't do it yourself but if you do then you definately can and that's where you save money and as it's you picking out carpets, tiles, light fittings, driveway, landscaping, security screens etc you will obviously buy the nicer things at the best price.

If you go with builders turn key package, they use all the cheapest stuff.

unexpected things is like how they cut the block which means you may need retaining walls and that can be costly, especially if over 1 mtr and has to be designe dby an engineer.

if u sell it as a H+L then u won't need window furnishings.

For Inala, you would want to keep it as cheap as possible.

 

[sue78]

atti,
I used to be in Adelaide. It was cheaper to build there (and houses are nicer too IMHO) so don't know what's changed. When I first built here in Bris I was shocked at the diff in building cost.
You may be comparing different "class" of builder ? I remember back 10 years or so Fairmont was one of the very popular project home builders over there & reasonably priced.

yes I'm from adelaide too and I agree with you. Most builders here charge over $200k for a single storey house. Just a few exceptions that build on budget.

Even at a cheap price, Hallmark should still inc S/S kitchen appliances....they buy it in bulk. Otherwise ask them to take it out and do it yourself. Basically you just need to supply your own appliances to the electrical guys.

after this experience you may find it'seasier to build 1 house with higher profit margin and much lower risks.

My calculations

2 x houses =$620k + holding costs

Value at current market price $395k (optimum since you can buy a builders brand new one at Heathwood Estate, much nicer area, nearby for $420k+)

Profit roughly $170k less holding costs and tax. It's not really that much and that's best case scenario.

My last project cost $340k bank valuation $450k rental $470 p/w.

I never do 2 houses at a time coz it's not worth the risk.

Next project cost $520k valuation at today's price would be about $670k, maybe more. It's a 42 sq+ Coral in Calamvale where land can be up to $330k. I am a bit nervous about this one coz high end prices are struggling but at least I know I wouldn't lose money.

 

[soyabean]

"I never do 2 houses at a time coz it's not worth the risk"

Hi Sue,
Why do you think 2 is more risky than 1 ?

 

[sue78]

2 is more risky for cashflow purposes. Honestly, sometimes it really just boils down to luck. Even in a high demand rental market, when we finished building one house we could not sell it nor rent it and when we eventually did, the tenants were con artists who never paid a cent in rent, thrashed our $500k+ new house and had to be removed by the police/courts.

It just depends how lucky you are and where the market is at when you finish. Don't underestimate bulding timeframes too. Even for a lowset smallish house expect a year from initial consultation with builder until the house is fully ready to be lived in. That's average and anything less is considered good.

If you decide to sell the property, give yourself at least 3 mths allowance. Even in 'hot' market, it can still take that long.

I've done it all and I'd rather play it safe with low LVR that I can use if anything should go wrong than be building 2 or 3 at a time. Especially when the profit isn't that much greater.

Plus it can be a bit of a nightmare at times and PI is suppose to be fun and hassle free. If it consumed too much of my time/life then it's not worth it.

I already have IPs under my belt that are still experiencing growth year on year and and I find building 1 property a year a good mix. Building can be a drain on cashflow too.