Building Townhouses on a Large Block

From: Ray Summerton

We have the opportunity to purchase a house in Adelaide on a Large Block 1100m2. We aim to build two townhouses on the rear while renting the house to cover the cost of the initial purchase. The block next door has three units on it so we don't foresee problems with Council Approval. We are in the moderate income group and wonder what are the steps involved in building and financing initially the two T/Hses, then perhaps knocking down the house and building a third T/Hse, using the whole project as a long term investment and borrowing the funds to do it. Is there someone out there who has done this and can offer advice or recommend someone who can? Many Thanks Ray
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Reply: 1
From: Steve Piggott

Hello Ray, have you done a project analysis and have you done a project valuation.
These are the very first places to start.
The numbers have to stack up! Sorry if i am treating you as a novice. If the project meets the financial criteria then proceed to council with architecturals for planning pre-approvals. All your doing is establishing what can be built and the relative costings.
May I also suggest that you purchase under the margin scheme so as to reduce your tax liability. Having the appropriate information regarding your project visit your financier. They will happily lend against the project if there's enough "fat" in it.
Perhaps consider joint-venture with the property owner... this will make things a lot more financially viable if you can cut some holding costs.
Hope this helps you.
Email me at
I am also in Adelaide.
Happy Investing Neb :)
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