Hi All,
I hope this is not a stupid question - but how is it that people are making money from subdivision these days? I've been doing some due dilligance on development opportunities around Adelaide (where large blocks are selling like hotcakes) and the figures just don't seem to add up to me. Obviously plenty of people see an opportunity, judging by how quickly these places are being snapped up - but I question how they are making a decent profit. For example, sub div land with an old house around Windsor Gardens, Hillcrest, etc areas are selling for around $360K. Taking into account all subdivision, building and holding costs, gst, and assuming the two completed new homes sell for around $400K (which seems about the norm) - where is the profit! Am I missing something?
Your views would be most welcome
I hope this is not a stupid question - but how is it that people are making money from subdivision these days? I've been doing some due dilligance on development opportunities around Adelaide (where large blocks are selling like hotcakes) and the figures just don't seem to add up to me. Obviously plenty of people see an opportunity, judging by how quickly these places are being snapped up - but I question how they are making a decent profit. For example, sub div land with an old house around Windsor Gardens, Hillcrest, etc areas are selling for around $360K. Taking into account all subdivision, building and holding costs, gst, and assuming the two completed new homes sell for around $400K (which seems about the norm) - where is the profit! Am I missing something?
Your views would be most welcome