Corner Block Subdivision

From: Jamieson .


Dear Forum,

I would appreciate any thoughts, experiences or advice about an idea I am currently investigating to subdivide off a small lot from our home property to build an IP.

We live in Redcliffe,Qld on an 800m2 corner allotment. I have checked with the council and it is allowable to do this and the minimum size block is 300m2 (which is actually the maximum that we could get without affecting the existing home).

By my estimation we could cover all the costs of subdivision and construction to move-in stage for around $125,000 (basic 3br house). From current sales and rentals I estimate that I could value it immediately at around $165,000 with rent around $200/wk.

This all seems to be a good idea to me - but what do you all think? I am assuming a slab on ground type, brick veneer house is appropriate but a high set would give more living space (garage/s under) and presumable more value if I was ever to sell. What style of house is best?

What level of fittings should be provided? Do we go for cheapness and minimal appliances (ie leave out range hoods, remote roller doors, etc).

Our plan would be to keep the IP then do up our existing old home and sell it (moving on to another renovator).

I think this forum is terrific - have learnt a great deal - thanks everyone.

Cheers

Jamieson.
 
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Corner Block Subdivision/Homework it.

Reply: 1
From: Gee Cee Cee


Hi Jamieson

I have not been up into your area for years.

Therefore I will only give a basic scenario.

Check with Council how long approval to sub divide will take & what is involved in costs, compliance, etc, prior to committing $.

Look at WHO your customer is going to be .

RE: Renter if you have to hold or
Purchaser if you are going to turn it around and move on quickly. (Developer type).

I would not be going for to many Rolls Royce fittings. Just a bit fancier facade than local houses.

Check out what is happening around you. Hi-Set / Low- Set. Prices they are selling or renting at.

Check out supply /demand & what is coming onto the market in next 6-12 mths.

Check out project builders. Costings & designs.

Then sum it all up and decide what to do.

Good luck

Gee Cee

P.S. If it works out perhaps you can offer us a free nights accomadation next time we are up that way.
 
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Corner Block Subdivision/Thanks & further question

Reply: 1.1
From: Jamieson .


Gee Cee

Thanks for your advice. I have been in to see the Council re their requirements etc and they were quite helpful. The cost of the subdivision is starting to mount up but will still be a fraction of the cost of buying a block of land in the area. Currently the beach areas of Redcliffe are in high demand so prospect of capital growth is good.

A further question has come to mind re financing. If my estimated costs (and borrowing requirements) are from the outset going to be less than 80% of the expected market valuation, can I have the subdivided block/property only as security. i.e would I need to provide a deposit from my home equity?

Regards

Jamieson
 
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Corner Block Subdivision/Thanks & further question

Reply: 1.1.1
From: Gee Cee Cee


I could not give you a real correct answer on this one. Will depend on financier and valuer.

Usually find though that they want some money in also.

Any ideas Rolf?


Gee Cee
 
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Corner Block Subdivision/Thanks & further question

Reply: 1.1.1.1
From: Rolf Latham


Well GC

its one of these that there is no clear answer on.

ANZ will do 80 easily on land only BUT plenty of conditions. Most lenders dont like land only but obviously this depends. A block in Toorak vs a block in Lightning Ridge is a little different in terms of saleability.

Try an independent mortgage broker.

Ta

Rolf
 
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Corner Block Subdivision/Thanks & further question

Reply: 1.1.1.1.1
From: Jamieson .


Thanks for your responses. I have never dealt with mortgage brokers although I note from the comments on this forum the value they can provide. Can you recommend someone in Brisbane, preferably on northside?

I have had preliminary discussions with my current bank and know that my borrowing capacity is sufficient, but have not gone into details of loan arrangements. I have an existing LOC with NAB at $110k. My property has increased in value due to the resurgence on the Redcliffe market but appraisals from local agents indicate anything from $190k to $230k (some suggest listing at $250k). The bank is going to do a "drive by" valuation but won't tell me what the valuation is. I get the feeling I'm not doing this right! In seeking to maximise my opportunities for investment presumable I should be aiming to get the maximum valuation possible? Should I pay a valuer to do an independent one?

Would appreciate your comments - thanks again for advice so far.

Cheers

Jamieson.
 
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