Help with building costs.

[Pablo]

Hi,

I am currently negotiating the purchase of the next door neighbours back yard so that I can do a 3 house sub division. But I am having trouble getting them down to a price where I will be able to make a profit as they don't fully appreciate the costs involved.

I am confident with all my numbers except for the building costs and would like to check them with you guys. The property is in Adelaide and I was looking at building three, 3 bedroom, 2 bath, single garage homes much like this one.

http://www.realestate.com.au/cgi-bi...mt=&header=&cc=&c=49671080&s=sa&tm=1245489724

I have estimated $150k for the build and then another $30k (per house) for extras like air con and a vehranda. But I didn't take into consideration that a I may get a discount for building 3 at once.

so what do people think?

If I don't buy the next doors backyard I can still subdivide my current property into 2 but if I can make an extra $50k by buying the backyard it will be better.

thanks
Pablo.

 

[Rockstar]

Hi Pablo,

Have you considered other costs such as council contributions, subdivision, stormwater management/retention, interest/holding costs, etc? ie: have you done a comprehensive feaso? Many hidden costs can lead one into trouble.

I had a $500 discount on my first duplex but none on the second or the third for building more than one at a time.

 

[Pablo]

I think I've got it all, this is for the single property.

-70k, land purchase (they want 100k)
-10k, subdivision (including council, water etc.)
-10k, fencing
-1k, tree removal (not significant)
-4k, Buying costs
-10k, interest
-15k, paving?
-150k, building
-30k, miscellaneous items (air con, veranda)

Total = 300k for a house I think will be worth 350k.

 

[RumpledElf]

-10k, subdivision (including council, water etc.)

Erm, I think you're missing sewer. We have gone over $10k on a regional subdivision, so smaller council fees etc (our green space contribution was $2400). I hear sewer can be up to $20k, and then some. Per new block, unless you can reuse the sewer line from the old one.

Also damn, where are you getting a $150k house from? They all seem to end up more than that once you add garages and footings and carpet and stuff, although I guess you could probably squeak it in for that much. Have you put those in with your miscellaneous stuff?

 

[Mamaof3]

we just finished one a couple of months ago and all up it costed around $150K per house.

actual house was alot less than that because $150K actually included the following which may/may not be applicable to every development:

-drawings
-council consents
-stormwater
-removal of excess soil
-rain water tanks
-engineers report
-fencing
-retaining
-paving
-landscaping
-actual house including floor coverings etc (basically a finished house minus window furnishings)

then we obviously had on top of this subdivision costs, conveyancing fees, interest on loan etc.

so in short, $150K for the build is achievable.

PM me if you want me to send you pics of what sort of house $150K got us!

 

[Mamaof3]

sorry meant to say email me instead of PM'ing me as i may miss the PMs

 

[Mamaof3]

verandah shouldn't cost that much

as for a/c i'd allow $6K based on last unit we purchased (ducted reverse cycle with inverter) - obviously will vary depending on design of unit you require for your house layout (# of zones etc) but all our units have been between $5K-$6.5K.

actually last set of a/c units we bought came with a $400 cash back offer so that brought the costs of the a/c units down even more...love cashback offers!

 

[Pablo]

Erm, I think you're missing sewer. We have gone over $10k on a regional subdivision, so smaller council fees etc (our green space contribution was $2400). I hear sewer can be up to $20k, and then some. Per new block, unless you can reuse the sewer line from the old one.

Rumpledelf,

The $10k is only for one house all up the fees would come to around $30k for 3 community title blocks.

The water/sewer connections are already there, when it gets onto my property I can bypass SA water so it won't be that expensive.

 

[Pablo]

Thanks Kimanand,

Nice to see my estimates are fairly close, I spoke with a friend who built 2 last year and they also confirm the building costs.

How about getting a discount for building more than one property at once, have you ever had any success?

 

[RumpledElf]

The $10k is only for one house all up the fees would come to around $30k for 3 community title blocks.

Ah, our $10k was for the pair. House we're probably going to build is $90k inclusive of pretty much everything but its not brick - brick in the same design got very expensive very fast as we're in one of those 'reactive soil' areas. But we still needed that separate sewer/water connection, you might want to check with that - unless you actually do have 3 water meters and 3 sewer connections there already for some reason.

 

[quoll]

we just finished one a couple of months ago and all up it costed around $150K per house.
.
.
.
so in short, $150K for the build is achievable.

Agree, $150k all up for a small 3/2 courtyard style house. I know a few developers that are using this as the mark. Seems to be working for everyone.

Pablo, maybe reduce the fittings and go with a slightly smaller overall dwelling. $100k to build + $50k for extras.

cheers
Graeme

 

[quoll]

Thanks Kimanand,

Nice to see my estimates are fairly close, I spoke with a friend who built 2 last year and they also confirm the building costs.

How about getting a discount for building more than one property at once, have you ever had any success?

NO

Every builder I've got quotes from, none will discount for multiple dwellings. So far I've only be asking on 2 or 3 houses so if you get into the 5+ I don't know.

Cheers
Graeme

 

[Mamaof3]

we've never been able to get any real discount for building multiple homes on the one site...

as mentioned by previous poster, check your house designs and see if its the most practical because the bigger the house the higher the build costs...you might be able to get away with a smaller house (still 3bd just smaller m2).