We currently rent my wife's grandmothers 3 bdr place in Richmond SA. We she eventually passes we have been told we could continue to rent the place indefinitely or purchase it and market value with a potentially small family discount. I'd value the property at around $400K.
The popular trend in Richmond at the moment is to do a hammerhead development and build a house in your backyard. As the blocks here are generally quite large and generally very deep.
The house we live in is situated close to the front of the block, and subject to the demolishment of a few sheds, a shade house and pulling up some concrete pavers ample room at the back for a 3 bdr house. (I have no idea how big the block actually is, but doing a few google map estimate's and real estate searches I'd say the total block is 750 sqm +/-). The back block could be 300 - 350 sqm). The block is flat no significant trees and there is easy access to the back of the block.
I had a chat to a builder client of mine and he said that it would potentially cost $220K - $250K to build an appropriate house. Looking at surrounding sales in a good market I may achieve a sale price of 400K - 425K for this sort of property.
So in a perfect world the profit for such an exercise would be maybe $150K less landscaping, less a new fence, less CGT, less funding costs, less other misc costs.
My question is for this sort of profit is it easier just to (prepare and then) sell the land, rather than go through the hassle of developing the property?
I'd say I could easily sell the land for $150K+. closer to $180K - $200K mark
And for those that have done this recently what was your net profit once it was done and dusted?
and before everyone starts throwing out other suggestions, i don't want to:
-Retain both properties
-Retain and use the equity to buy other properties
-Move into the newer property and sell the existing house (although that would be my wife's preference).
I would rather $150K in my pocket,l have a wealth creation plan in place already and I don't need any more additional geared investments. Cheers!
The popular trend in Richmond at the moment is to do a hammerhead development and build a house in your backyard. As the blocks here are generally quite large and generally very deep.
The house we live in is situated close to the front of the block, and subject to the demolishment of a few sheds, a shade house and pulling up some concrete pavers ample room at the back for a 3 bdr house. (I have no idea how big the block actually is, but doing a few google map estimate's and real estate searches I'd say the total block is 750 sqm +/-). The back block could be 300 - 350 sqm). The block is flat no significant trees and there is easy access to the back of the block.
I had a chat to a builder client of mine and he said that it would potentially cost $220K - $250K to build an appropriate house. Looking at surrounding sales in a good market I may achieve a sale price of 400K - 425K for this sort of property.
So in a perfect world the profit for such an exercise would be maybe $150K less landscaping, less a new fence, less CGT, less funding costs, less other misc costs.
My question is for this sort of profit is it easier just to (prepare and then) sell the land, rather than go through the hassle of developing the property?
I'd say I could easily sell the land for $150K+. closer to $180K - $200K mark
And for those that have done this recently what was your net profit once it was done and dusted?
and before everyone starts throwing out other suggestions, i don't want to:
-Retain both properties
-Retain and use the equity to buy other properties
-Move into the newer property and sell the existing house (although that would be my wife's preference).
I would rather $150K in my pocket,l have a wealth creation plan in place already and I don't need any more additional geared investments. Cheers!
