Dual Occupancy Development Dilemma

[esdarch]

Hi all,

I intent to build 2nd dwelling at backyard whilst retain the front house in Albion VIC. It is corner block and 150sqm spare land left for new building/ subdivision. I have not decided to sell or keep both for rent.

There are 3 options coming up:

1- Single storey dwelling - 3 beds/1 bath/2 carspace, 110sqm. Market value ~ 375k. Construction cost - 130k (If I go to owner builder path, probably the cost is 100k and be able to fund by cash then refinance after completion)

2- Double storey dwelling - 3 beds/2 bath/2 carspace, 130sqm. Market value ~ 390k. Construction cost - 182k

3- Double storey dwelling - 4 beds/2 bath/2 carspace, 150sqm. Market value ~ 420k. Construction cost - 250k

Apparently double storey will have small footsprint and allow for more open spaces/ backyards. However the single storey cost less to build and may suitable for small family/ FHB who is likely the target market.

Should I go with the maximum development option or stick to cheap & affordable one?

Ta.

 

[mystery]

Wow ... that's a small lot. Are you sure the council will approve a subdivision dwelling on 150m2? I would be surprised if they do. Have you spoken to Council or are you just thinking its a formality?

Mystery

 

[SamL]

Going for option 3 over 2 doesn't make any sense. An extra 70k spend for only 30k of value. Personally would be maximizing value using option 1, I can't imagine the rental value changing much between 1 and 2 either, saying that a second bathroom is a pretty big advantage.

 

[esdarch]

Going for option 3 over 2 doesn't make any sense. An extra 70k spend for only 30k of value. Personally would be maximizing value using option 1, I can't imagine the rental value changing much between 1 and 2 either, saying that a second bathroom is a pretty big advantage.

Yeah, financially option 1 is best bet. Just confused due to many advice like double storey will have better look, more value, etc.

The block is close to station & shopping centre so council seams ok if 10x15m rectangle fit in backyard.

 

[imbi3]

I would go for option 1 as long as there is a market for it. I would have thought 2 BR unit in Albion would be approx. $300k?

 

[esdarch]

I would go for option 1 as long as there is a market for it. I would have thought 2 BR unit in Albion would be approx. $300k?

RE statistics shows 30% independent youth & 17% maturing independence people & 11% couple & family living in the area. But it is likely more FHB couple pick the area for starting.

New 2 BR unit sales at $300-320k and 3 BR at $350-375k, and no data for 4 beds. So wondering if the fourth bedroom would be an advantage because the lack of competitive product?

Ta.

 

[imbi3]

RE statistics shows 30% independent youth & 17% maturing independence people & 11% couple & family living in the area. But it is likely more FHB couple pick the area for starting.

New 2 BR unit sales at $300-320k and 3 BR at $350-375k, and no data for 4 beds. So wondering if the fourth bedroom would be an advantage because the lack of competitive product?

Ta.

I know a lot of new townhouses/units in the area would either be 2 or 3 BRs. Rarely you would see 4 BR. Maybe worth giving one of the local REA a call. Probably no point to spend $50k more just to get the same amount of money back on the sale price. Your ROI would be lower whilst risk is higher

 

[FFChaser]

Hi all,

I intent to build 2nd dwelling at backyard whilst retain the front house in Albion VIC. It is corner block and 150sqm spare land left for new building/ subdivision. I have not decided to sell or keep both for rent.

There are 3 options coming up:

1- Single storey dwelling - 3 beds/1 bath/2 carspace, 110sqm. Market value ~ 375k. Construction cost - 130k (If I go to owner builder path, probably the cost is 100k and be able to fund by cash then refinance after completion)

2- Double storey dwelling - 3 beds/2 bath/2 carspace, 130sqm. Market value ~ 390k. Construction cost - 182k

3- Double storey dwelling - 4 beds/2 bath/2 carspace, 150sqm. Market value ~ 420k. Construction cost - 250k

Apparently double storey will have small footsprint and allow for more open spaces/ backyards. However the single storey cost less to build and may suitable for small family/ FHB who is likely the target market.

Should I go with the maximum development option or stick to cheap & affordable one?

Ta.

able to build a 3bed single storey building as well, just wondering how do u get those construction cost? did u get several quotes from builders already?

 

[esdarch]

able to build a 3bed single storey building as well, just wondering how do u get those construction cost? did u get several quotes from builders already?

Just discuss with my friend who is builder and compare to construction cost guide from BMT and Archicentre. The finish is low/ medium and I have friends willing to help after lock up stage.

Thanks imbi3, definitely it is not worth to try option 3.

 

[railer]

Would be very interested to see plans for a 3br single on 150sqm. That's tiny!