Cost of building units + subdividing???

[kristy77]

I'm looking at a (house and land) property for sale that has
opportunity to purchase as a package the back block with plans and permits for 2 x 2 bedroom units for $230,000 or just the home for $180,000 in Victoria.

How much would it cost me to then build to units (including subdivision etc)???

Kristy

 

[Harris]

I'm looking at a (house and land) property for sale that has
opportunity to purchase as a package the back block with plans and permits for 2 x 2 bedroom units for $230,000 or just the home for $180,000 in Victoria.

How much would it cost me to then build to units (including subdivision etc)???

Kristy

so each unit site is costing you about $25k.. depending on where it is situated and demand level, it can be a good buy long term to get both.

Also depends on the rental yield - it will be less if you get the house and the land at the back.

Check when the permits expire, though shouldn't be a drama getting extensions on it from the council.

Cost wise, it varies depending on the design however by the sounds of it, you are looking at very basic single story dwellings -

2 bedder with a bath - say 12 squares.. around $100k each (give or take 10%) for construction cost (if its all level) - a bit more for landscaping.

Harris

 

[kristy77]

Wasn't expecting it to be so much! Is that because of sub. etc?
It would be our first IP, and we have no equity and very little savings - would you start off with this property, or would you go for something else with better returns to start with???

 

[Harris]

Wasn't expecting it to be so much! Is that because of sub. etc?
It would be our first IP, and we have no equity and very little savings - would you start off with this property, or would you go for something else with better returns to start with???

For me personally each new prop should, not only be situated in a growth corridor.. it must also have decent enough rental return so that it doesnt become an impediment in getting to the purchase of next IP.

Starting out, I would counsel playing relatively safe and getting something with best rental yield in the local area you are looking at. Then once you are more familiar with the steps leading to purchase and prop mgt, use your research skills to digress into sub div etc.

Harris

 

[kristy77]

Thankyou. I think I would feel more comfortable not having to worry about all that for now. The rental yield wouldn't be very good on that property for how much we would have to pay for the entire package.

 

[lizzie]

harris isn't far off for a 2 bedder (single gge, two bathrooms). and $100k would get you only a fairly basic finish (laminate benches, floor tiles). cost would also depend if you were going single or double story. for double, i'd go up to around $120-150k each.

if this is your first, i'd look for something easier - and the learning curve and subsequent brain implosion on an easy one will be enough to start with.

what is the block size of the home? is it comparable to the unit site and can be developed in the future? what would the rental income be from the house?

imo, you'd be better off buying a house on a large block and getting your own plans and approvals for development - then you're getting rent while everything is being processed (can take 12 months or more), and having the plans drawn and thru council is not rocket science - and a lot cheaper than paying for da approved. the architect, surveyor and council will guide you all the way as to what is required (ie, go down to the water board and get these stamped before taking them to council).

just make sure you do your due diligance on the block with the relevant authorities, to ensure you can, in theory, "do" what your propose, before purchasing.

and watch that shadowing of the neighbours!