how to find suburbs suitable for subdivision

[Paulina]

Hi dear fellow investors,

I am considering to buy a development site for subdivision in Brisbane. Site price below 1m. Not sure how should I locate if one is the right suburb.

I guess high growth area will be still considered. Second, the number might work and it will make profit. Logan area seems offer some good opportunity. Anyone had done subdivision please give some inspiration~~

cheers
Paulina

 

[my03]

Hi Paulina, I'm very new to investing, but defiantly not new to subdivisions or development projects.

I am a town planner and building surveyor and I have approved many subdivisions for local government so I can provide you with my thoughts on the matter:

1. The decision to go ahead with a project should not be based on anything other that the fact you can make a profit. This means you need to do your due diligence on the site and work out if you can make a profit or not. This usually starts by conservatively working out your gross realisation (how much you can sell the end product for) then deducting all costs - these include but are not limited to interest on finance, construction costs, legals, development application and architectural fees, surveyor fees, developer contributions, and costs of any required infrastructure (easements etc). GROSS REALISATION - (COSTS+PROFIT MARGIN) = RESIDUAL LAND PRICE

The residual land price is the price you should be paying for the land. remember, money is not made when you sell the project, it's made when you buy it, if you paid too much for it you wont make money.

2. When looking for a site suitable for subdivision I would usually consider these factors in order of importance:

- lot size (what is the minimum lot size for this zone? do you have enough to get multiple lots out of one site? Have you factored in requirements for access and driveways which may or may not eat into your lot sizes depending on the applicable planning instruments?

- lot layout (what is the shape of the lot? you might have enough area size but is the lot a funny shape that it's not usable? put some indicative building envelopes on there to see if it works, how will the lots be placed and how will they be accessed?)

- Site restrictions/limitations (is the land subject to any restrictions? are there easements going through? is it bushfire prone? is it flood prone? what is the topography of the site? which way does the land slope? how will the new lots be drained? will water fall to the street or will you need to pay tens of thousands of dollars to your neighbours to create drainage easements $$$?

This is all introductory but it gives you a brief overview of what you're in for. You do not know how many self proclaimed "property gurus" I've seen through the years get stung because they've bought a dud site or they've been stung and lost some serious money because they did not do the proper research before buying a site.

Good luck

 

[dolby]

just be careful of the infrastructure costs in QLD as its a killer

 

[Paulina]

Hi my03,

thank you very much for your message and providing supportive information. From what you said I guess finding a good and experienced town planner will be essential.

I had spoken with one local agent who always sell small lots of land. He introduces me to a town planner. Are there any questions I should ask to know if the person is a good town planner?

I will definitely do the number crunch before giving an offer. Thanks my03.

The interesting thing I found today after I talk to council, this 5000m2+ land can be only divided into two lots. Land shape is alright. Slope is hard to assess without looking at it. May I know if there is free access to the information of degree of slope, easement, sewer, storm water? I know town planner has software to assess the site.

 

[Paulina]

Hi Dolby,

Thank you. I will bare in mind and check infrastructure cost and include in my number crunch.

 

[my03]

Hi my03,

thank you very much for your message and providing supportive information. From what you said I guess finding a good and experienced town planner will be essential.

I had spoken with one local agent who always sell small lots of land. He introduces me to a town planner. Are there any questions I should ask to know if the person is a good town planner?

I will definitely do the number crunch before giving an offer. Thanks my03.

The interesting thing I found today after I talk to council, this 5000m2+ land can be only divided into two lots. Land shape is alright. Slope is hard to assess without looking at it. May I know if there is free access to the information of degree of slope, easement, sewer, storm water? I know town planner has software to assess the site.

Like any profession, there are good and bad town planners, a good starting point would be looking at some consultancy's websites and see if they have experience dealing with subdivision applications.

You can find sewer diagrams and easements by looking at sewer diagrams from Sydney water you can find easements by purchasing a deposited plan which marks easements. You would hope that the agent has these in the contract of sale along with a 149 certificate.

Depending on which council they have topographical plans, bushfire zones, zoning, endangered species, etc which you can purchase, some cost money, some are free all you need to do is call and ask, and some are even available on the website, some councils have great mapping, some don't.

Good luck

 

[Paulina]

thank you very much My03.