This one should be a goer then. http://www.realestate.com.au/property-house-sa-seaton-117695299 ticks a lot of boxes. Purchase price will be the key.
First development 8.65% ROI and $100pw cashflow positive
- Thread starter Erica
- Start date
Hey Erica, thanks for sharing your storey! I think you should be super proud of what you have achieved on your first attempt and as everyone has said the knowledge gained on this first one is worth more than the $ figure. Reading over your posts sound like your a pro now! 
I just had a question regarding the subdivision.
Did you say this was done before you got DA? Or did you more mean you got all the required paperwork for the subdivision and then submitted to council and then subdivided once approved?
Only reason I ask is because I am doing the same development (Rear of PPOR) and I have had all drawings/engineering completed and then submitted those before I have subdivided and have been granted DA.
If so I am just confused by this because firstly what happens if you go through all the work to get the propery subdivided and then cannot get DA approval? I understand in essence you have 2 blocks of land which should be more valuable but what happens if you cannot sell them because people do there research and know the rear property had a declined.
Apologies if I have read this wrong. I read half before bed last night and the other half this morning
I just had a question regarding the subdivision.
Did you say this was done before you got DA? Or did you more mean you got all the required paperwork for the subdivision and then submitted to council and then subdivided once approved?
Only reason I ask is because I am doing the same development (Rear of PPOR) and I have had all drawings/engineering completed and then submitted those before I have subdivided and have been granted DA.
If so I am just confused by this because firstly what happens if you go through all the work to get the propery subdivided and then cannot get DA approval? I understand in essence you have 2 blocks of land which should be more valuable but what happens if you cannot sell them because people do there research and know the rear property had a declined.
Apologies if I have read this wrong. I read half before bed last night and the other half this morning
Cheers Brady
Hilarious, we must both be addicted to realestate.com.au.
I drove past this one on Friday on my way home from work, measured up the back yard (from the foot path) contacted the agent, and ordered gas/water/sewer/power location notifications.
Thanks for keeping your eye out for me
Hilarious, we must both be addicted to realestate.com.au.
I drove past this one on Friday on my way home from work, measured up the back yard (from the foot path) contacted the agent, and ordered gas/water/sewer/power location notifications.
Thanks for keeping your eye out for me
G'day Albanga
Development Assessment is granted first, the idea is to spend the bare minimum on the site (just get plans drawn and submitted) to get the DA granted.
You would hate to spend money demolishing trees/shedding etc, if the DA was then rejected.
Once you have DA granted you can then go ahead and do any/all capital works to proceed with the full subdivision ie/ demolish the back yard, put up new fencing, put in a new curb cross over.
Once you have the DA granted your surveyor will do a preliminary site survey, submit plans of subdivision to the relevant authorities, like SA water, and over the course of about 6-12mths you will have multiple fees to pay, for a new water meter, new sewer inspection point, open space contribution fee and finally survey will be pegged and the plan of division will signed off on by the development assessment commission and new title will be issued.
Development Assessment is granted first, the idea is to spend the bare minimum on the site (just get plans drawn and submitted) to get the DA granted.
You would hate to spend money demolishing trees/shedding etc, if the DA was then rejected.
Once you have DA granted you can then go ahead and do any/all capital works to proceed with the full subdivision ie/ demolish the back yard, put up new fencing, put in a new curb cross over.
Once you have the DA granted your surveyor will do a preliminary site survey, submit plans of subdivision to the relevant authorities, like SA water, and over the course of about 6-12mths you will have multiple fees to pay, for a new water meter, new sewer inspection point, open space contribution fee and finally survey will be pegged and the plan of division will signed off on by the development assessment commission and new title will be issued.
Hey Erica,
Thanks for your detailed reply.
I was just hoping to further pick your brain on this though
My draftsmen had said that the subdivision can usually take place during or after the construction. It was a while ago that i discussed this with him but he did mention it can help the surveyor when setting the boundaries when construction has started. I was reading back on your posts regarding this though and you made some good points about why this may not be a good approach. Did you subdivide first and then start construction?
Also I was just curious as to how the subdivision costs were financed? Did you pay for these with your own money or did you lend the funds? If you lent the funds I am curious as to how this worked as there was a lot of unforeseen costs?
Thanks for your detailed reply.
I was just hoping to further pick your brain on this though
My draftsmen had said that the subdivision can usually take place during or after the construction. It was a while ago that i discussed this with him but he did mention it can help the surveyor when setting the boundaries when construction has started. I was reading back on your posts regarding this though and you made some good points about why this may not be a good approach. Did you subdivide first and then start construction?
Also I was just curious as to how the subdivision costs were financed? Did you pay for these with your own money or did you lend the funds? If you lent the funds I am curious as to how this worked as there was a lot of unforeseen costs?
Hilarious, we must both be addicted to realestate.com.au.
I drove past this one on Friday on my way home from work, measured up the back yard (from the foot path) contacted the agent, and ordered gas/water/sewer/power location notifications.
Thanks for keeping your eye out for me
Haha I've got my saved searches... gives me alerts (don't always work and most of the time I end up going in myself about twice a day
)Best of luck
hi albanga
The subdivision costs were paid for using our own money- no loan, as such, was set up specifically for these costs- I don't believe you can actually get the bank to add these 'soft costs' on top of the construction funding (but I'm no broker).
However we were drawing down on a large line of credit against our PPOR, so essentially was using 100% borrowed money to fund the subdivision.
I completed the subdivision before commencing the build. That is- I had to wait until the new titles were issued for both the existing house lot and the new vacant lot as I needed the new title as security for the construction loan. Before the construction loan was approved a desktop valuation was required to ensure the build + land value = comparable market value of other builds in the area.
It is essential to have a good mortgage broker guide you through what you want to do with the development to ensure you can get funding as needed. Especially if you plan to demolish any significant structures before you commence- worst case scenario- bank finds out you have reduced the value of their security (without getting the banks ok) before the subdivision is complete and they call in the loan on you. (Unlikely to happen I know- but best to do these things carefully).
The subdivision costs were paid for using our own money- no loan, as such, was set up specifically for these costs- I don't believe you can actually get the bank to add these 'soft costs' on top of the construction funding (but I'm no broker).
However we were drawing down on a large line of credit against our PPOR, so essentially was using 100% borrowed money to fund the subdivision.
I completed the subdivision before commencing the build. That is- I had to wait until the new titles were issued for both the existing house lot and the new vacant lot as I needed the new title as security for the construction loan. Before the construction loan was approved a desktop valuation was required to ensure the build + land value = comparable market value of other builds in the area.
It is essential to have a good mortgage broker guide you through what you want to do with the development to ensure you can get funding as needed. Especially if you plan to demolish any significant structures before you commence- worst case scenario- bank finds out you have reduced the value of their security (without getting the banks ok) before the subdivision is complete and they call in the loan on you. (Unlikely to happen I know- but best to do these things carefully).
Following up on this thread, about to submit my application to council for planning approval. But as expected have a dreaded sewer main extension required.
Did you have the option of going with a community title instead of doing the extension?
Did you get a prelim report done up from SA Water first to see how much it was going to cost before proceeding?
If wanting to go with Torrens title I've got to extend by around 20m as well. But I'll be having an extra point as going with 3 on the site (STCC).
Trying to weigh up the impact of Community Title compared to Torrens.
Did you have the option of going with a community title instead of doing the extension?
Did you get a prelim report done up from SA Water first to see how much it was going to cost before proceeding?
If wanting to go with Torrens title I've got to extend by around 20m as well. But I'll be having an extra point as going with 3 on the site (STCC).
Trying to weigh up the impact of Community Title compared to Torrens.
Hi Brady
The one I am doing at Plympton at the moment is probably more relevant to your question, this one is also a corner block and also needs a 20m sewer main extension, - I canvased my surveyor on community title vs torrens option for this one too, for trying to keep costs down, his answer was: basically because the properties have their own street frontages and no shared property they are not really community title properties- SA water won't just allow you to do community title because you want to keep costs down, their priority is infrastructure that meets the needs of the demand/supply. Does that make sense? The best person to explain it clearly would be your surveyor.
With my hammerhead development in Morphett Vale I could have gone community title for shared sewer, but would have had to do shared common driveway for both dwellings to meet the community title definition, but since I had room for each property to be completely separate with their own dirveways I decided to go with the torrens title for better valuation/ resale so bit the bullet spent the extra on the sewer main extension.
The one I am doing at Plympton at the moment is probably more relevant to your question, this one is also a corner block and also needs a 20m sewer main extension, - I canvased my surveyor on community title vs torrens option for this one too, for trying to keep costs down, his answer was: basically because the properties have their own street frontages and no shared property they are not really community title properties- SA water won't just allow you to do community title because you want to keep costs down, their priority is infrastructure that meets the needs of the demand/supply. Does that make sense? The best person to explain it clearly would be your surveyor.
With my hammerhead development in Morphett Vale I could have gone community title for shared sewer, but would have had to do shared common driveway for both dwellings to meet the community title definition, but since I had room for each property to be completely separate with their own dirveways I decided to go with the torrens title for better valuation/ resale so bit the bullet spent the extra on the sewer main extension.
This will always be the best result,But,depending on the area,community titles sell just as well.I have just bought another home in MT Barker,old HTSA stock,massive block,i will go community title as the whole street is full of them.
Yes,it would.I thought it was your choice,although SA Water do play god sometimes!!
Yes I'm seeing a lot more of these popping up in my area (Modbury) for brand new stock thats been developed. Developers are paying less for the costs to do and buyers haven't seemed too concerned.
Spoke to another developer/builder this afternoon and his comments were 'most buyers are buying the house, not the title...' seemed like more emphasis on a quality product rather then worried about where the poop goes. Said you will occasionally get those who will only focus on Torrens Title, but they're probably the same buyers who want the house for nothing.
Perhaps community title may be more simple when redeveloping the whole site, probably a lot of the limiting factors for me is because I keep the existing houses. I'm not too knowledgeable in this side of things, just going on what my surveyor has told me for myown 2 developments.
