construction of a boarding house in sydney

Hi Everyone,

I am new to this forum but i have been reading the forum for around a week, really good place, lots of knowledge and experiences. love it. :D


I got a idea in my mind recently and have been trying to assess the idea to see if this is practical. any suggestion is much appreciated! :D:D

I have a block of land around 334 sq, with 4 mins walk distance to train station and within 10km direct distance to the CITY. Zoned R3 medium density. (current house is at really poor situation but livable, tenanted currently) house is mortgaged trough NAB, 80% loan.

Wanting to knock it down and build a boarding house on it. right now i am thinking, give every room a small bath, kitchen, toilet and laundry. make it looks more like studio apartments rather then shared accommodation.

Got a few problems i need to fix before i can make this construction thing happen. >_<

1. Will council be more likely to approve my idea of "studio alike Boarding House"? Planning to make a booking on monday morning and talk to a duty town planner perhaps, but wont hurt to ask here I guess? Just for discussion, will post back once i got answer from the planner as well. the council is Canterbury Council.

2. Floor space ratio, according to what I searched on the Canterbury Council LEP, should be 0.6:1 for land less then 400 SQ. would this mean I can only build up to 204 SQ internal area being that the LAND is only 334 SQ? If I build double storey, would this become 204*2= 408 SQ? This makes a huge difference as 204 SQ i can only build 8 rooms MAX, if 408SQ is permited, 16rooms is possible, which means more income. ( same, will ask next week when I see a planner, but will appreciate if anyone know the answer :D )

3. Construction Loan, I can pull out 100k to 150k to build the boarding house, if I loan the construction, from my understanding, most bank would laon up to max 70%. Will it be hard to find a bank to mortgage this? ( should be commercial loan if I am right) Any one have any good broker that I can talk to? anywhere around Sydney is fine by me. :D thanks in advance

4. Would it be hard to overcome the DA? for example, neighbors stand against the proposal?


5. If any one know any good architect or person who can help on DA around area of Canterbury Council, would be much appreciated if you can PM me the contact or post it up here.

Thanks a lot guys!
 
You really going to need to engage a town planner specialising in boarding homes.

Re the loan side of things - commercial construction loans are more expensive than residential so preferable to fund it from existing security. If thats now an option then ANZ will do 70% (depending on the loan amount and which business team it would sit under) and St George will do 65%.

Is it a fixed price building contract? Whats the loan amount?

Expect to pay around $5k-6k for valuation and QS report.
 
Thanks a lot for your reply

Not quite sure what QS report means, googled "QS report" came up different answers, mind if you could explain a little? :p thanks

The loan amount is not a sure thing right now, as it depends on the plan,(numbers of room, facility) but I estimate it would be between 200k to 500k. Sry but too many things ain't that clear right now lol

One more thing, I financed the house through nab, does this mean, if I want to knock the house down and build new one with 100% cash, no loan at all, do I need to inform nab about the construction before I start? Any chance they reject it? I mean, do they have right to stop me doing this? Being that the house is the security right now.

Sry I have so many questions
Thanks bro :)
 
I've got a few in brisbane, what you describe is studio apartments not a boarding house BH has a room and shared facililities. Up here council gives special dispensation to BH so you get more GFA.

I read that NSW has special funding to help build them, not sure on that though.

I think you are very much under valuing the build cost I'd work off $3 to $4k per square metre, particularly with kitchen and bath in each. You'll need fire rating on every room and disability access through out. You really don't need a laundry in every room IMO.

I've looked into building a few but have decided you are just better off buying an existing one, don't let me put you off though, look into it in detail.
 
Thanks a lot for your reply

Not quite sure what QS report means, googled "QS report" came up different answers, mind if you could explain a little? :p thanks

The loan amount is not a sure thing right now, as it depends on the plan,(numbers of room, facility) but I estimate it would be between 200k to 500k. Sry but too many things ain't that clear right now lol

One more thing, I financed the house through nab, does this mean, if I want to knock the house down and build new one with 100% cash, no loan at all, do I need to inform nab about the construction before I start? Any chance they reject it? I mean, do they have right to stop me doing this? Being that the house is the security right now.

Sry I have so many questions
Thanks bro :)

QS Report is a report from a Quantity Surveyor who would provide an estimation of the construction cost in addition to things like cashflow forecasts I believe.

Shahin may know a good Quantity Surveyor to speak to.
 
Is it a fixed price building contract? Whats the loan amount?

IMO, you're going to want to do a fixed price building contract and make sure you have good construction documents to avoid nasty stings in the tail.

May also want to engage a client side project manager to oversee the construction to ensure the builder you engage has given you a fully compliant quote AND that your tender documentation is up to scratch.
 
IMO, you're going to want to do a fixed price building contract and make sure you have good construction documents to avoid nasty stings in the tail.

May also want to engage a client side project manager to oversee the construction to ensure the builder you engage has given you a fully compliant quote AND that your tender documentation is up to scratch.

Definitely but the trick here is to ensure that everything is included. For the first time punter its almost impossible to think of everything to include. For my development it went through about a dozen or so revisions because I would think of random things to include progressively.
 
Quantity Surveyor is required by lenders on all commercial construction loans.

It assess the complete construction cost as well as ensure that the progress payments are in line with each stage. It ensures that the lender doesn't overpay at any particular claim stage.

Just like valuers - lenders have a QS panel so you need to ensure that you get one done from the panel acceptable to that lender and not some random QS person.
 
Definitely but the trick here is to ensure that everything is included. For the first time punter its almost impossible to think of everything to include. For my development it went through about a dozen or so revisions because I would think of random things to include progressively.

Yeah, hence my suggestion to speak to a residential project manager. Someone like Scott No Mates, who worked as a construction project manager before becoming client side so is going to be aware of all the things that need to go in to the building.
 
Quantity Surveyor is required by lenders on all commercial construction loans.

It assess the complete construction cost as well as ensure that the progress payments are in line with each stage. It ensures that the lender doesn't overpay at any particular claim stage.

Just like valuers - lenders have a QS panel so you need to ensure that you get one done from the panel acceptable to that lender and not some random QS person.

Hmmm... how to get on to that panel...
 
Thanks a lot guys, very useful information.
For sure I would want to get a fixed price construction contract, have to see who I can use?
Been to home world in kellyville, most of the builder said they can build if I have a approved plan, but I have a impression that they will be the expensive ones.

Looks like I have to get a day or half off to seek advice from a town planner.... Lol

Btw, headsonbeds, thanks for the reply, but are you saying my eastimate of 500k construction cost is still not enough? I was thinking to gather 300k and build it without a commercial loan. Looks like that won't be happening?
 
Thanks a lot guys, very useful information.
For sure I would want to get a fixed price construction contract, have to see who I can use?
Been to home world in kellyville, most of the builder said they can build if I have a approved plan, but I have a impression that they will be the expensive ones.

Looks like I have to get a day or half off to seek advice from a town planner.... Lol

Btw, headsonbeds, thanks for the reply, but are you saying my eastimate of 500k construction cost is still not enough? I was thinking to gather 300k and build it without a commercial loan. Looks like that won't be happening?

I'd really recommend finding a project manager you can trust to help you with the construction of the project. The town planner/architect who is experience with boarding houses may have some suggestions.

Unfortunately now is a more expensive time to build in Sydney as the construction industry is going pretty hard, especially residential construction.

As a VERY, VERY basic guide, you would look at costs of around $1700-2000/m2 to build a 2 storey boarding house structure in brick veneer.

So 408sqm = approximately $693,600-816,000+GST.

Cost is higher than normal home construction as you will probably have more services than a regular home (more expensive) as well as perhaps more onerous fire protection requirements.

Square metre rate will be dependent on many things, so please remember that's a VERY rough guide.
 
$500k won't touch the sides. You aren't building a house this one has 8+ kitchens/bathrooms, individual a/c, private areas, common lounge areas and has to meet fire regulations.
 
Got in contact with a company with the web address: council experts.com.au
Seems like real professional. Any one used their service before?
They do plan design/ architech design and help on getting da approval

I have been asked to pay $880 for a assessment work to be done, before they can quote me how much the whole project is going to cost.

I'm going to pay them tomorrow morning, before that, does any one think this is not normal? Sry if this is the market rules, it is my first time dealing with such company, not sure about so many things

:p
 
Got in contact with a company with the web address: council experts.com.au
Seems like real professional. Any one used their service before?
They do plan design/ architech design and help on getting da approval

I have been asked to pay $880 for a assessment work to be done, before they can quote me how much the whole project is going to cost.

I'm going to pay them tomorrow morning, before that, does any one think this is not normal? Sry if this is the market rules, it is my first time dealing with such company, not sure about so many things

:p

Pay them tomorrow morning? Why the rush?

I'd shop around a bit first, speak to them about your plans, maybe even do a bit of a sketch plan and see if you can have a coffee and chat about it all.

I wouldn't pay anythng yet.
 
Got in contact with a company with the web address: council experts.com.au
Seems like real professional. Any one used their service before?
They do plan design/ architech design and help on getting da approval

I have been asked to pay $880 for a assessment work to be done, before they can quote me how much the whole project is going to cost.
:p



Were you born yesterday BC?

Even the domain name is up for sale
 
Thanks lol Scott, I might have typed the wrong web address
The web address is councilapproval.com.au



Hmm, I thought about it, I did seem a bit rush.... I'll have a look online see what others have.

With the one that I chated to, they claim that they have staffs that worked at local council for years, and one of the team is specifically concentrate on Canterbury council. Also they have 6 boarding house case going on right now, 2 of which are in Canterbury council area. That's why I felt they might be the right people to do it.

Now, Is $880 seems too much for a assessment?
 
maybe Ring up about this property
http://australia.trovit.com/propert...ype.1/origin.2/section.1/section_type.1/pop.1

It has a DA like you want, they'll give you info for free and you can see what's possible. Just remember it will take maybe 2 years to build, factor that into your costs.

Thanks mate, Yeah, it is near manly, a pretty good location as well, but the land + DA would sell for 1m+ at least. If there are more interests on it, could be 1.5, who Knows these days? If I buy the land, I won't have enough to build.
 
I wasn't talking about you actually buying it. Just ring the agent talk prices now and when completed, returns and get there package sent to you. Also ask them if they've had the build priced. This will get you some good intel for your project.

They architect or design mob they used maybe a great win as well.
 
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