Investing in a vacant block of land then building

[hwd007]

Investing in a vacant block of land then building

I am considering this as an option. How difficult is this approach ? I would like to buy a block of land and build at least two town houses on it with landscaped garden.

I know it can take up to 20 weeks to build a house according to Jennings. I mean I guess there are many other things that need doing like getting council approval to subdivide and build etc... then the plan goes to approval process etc..

I mean what are the steps involved here ?

1. look at land

2. get council pre-approval ?

3. buy land ?

4. get builder to build though I guess you need to set this up early in the piece by a contract builder that may already have a fixed design.

5. Building starts

6. Make Progress Payments to builder ?

7. Get an agent involved

8 settle property and advertise for tenant ?

just wondering if I have missed any steps here.

 

[bundy1964]

Hi

1A Get finance sorted out.

bundy

 

[siacci]

Depends on your state. If in VIC then depends on your council. Are they favorable to unit developments or anti? If they say no you can appeal, but you must allow about a year. Find a builder, good luck, add another couple of months. Find a draftsman, 6-12 week waiting periods. The list goes on..... BUT in my assesment of the same idea, in the right area this is a boomer of an idea. All you need do is find a bolck and add the cost of the land and the cost of the units together ond presto almost an 80% LV for nicks, but a bit of imagination and a bit of stress that will go away anyhow.I am currently looking at a place in East Gippsland with a dump on it. It is a nice wide block that will take 2 double storey 4BR unit. Total cost of project will be about 480k, value about 600k plus!!! Go figure eh!

 

[frenzy]

20 weeks is low as said before some councils can take 10 week just to approve the plans then add 20 weeks construction time

 

[hwd007]

Hmm now I am concerned ! 30 weeks ? I heard about some guy who has been waiting since last November for construction to complete on a small project he started that should have taken a few months. Ouch ! the interest must be hurting.

 

[StevenO]

I'm in a similar position - I bought a block of land at the end of last year and had the plans for a small 2 lot dual occupancy subdivision into the council by February. I'm still waiting on them to finish assessing it but they don't seem to care how long it takes.

 

[hwd007]

Perhaps you could bribe them? offer them a free weekend holiday at Noosa ?

Perhaps you could offer tent accommodation until you get approval ?

Or perhaps contact the small business association to put pressure on government to get councils to lift their game ? That said these things do take a while, planning regulations, public objections etc...

But I do sympathize as I am going to have to go through the same scenario if I go that way.

damn annoying.

 

[siacci]

It can still be an excellent way to go, you just have to factor in the council and interest bill. The construction side of things can be simple compared to the council. As stated above ,they do not care. The other thing you can do is to get the permits through and sell the whole deal to a builder. They cannot afford the time or the money invested in a potential dual occ. or unit development site, but they will pay a premium for land with permits if they can still make money from it. There are always options so try look at it from a different persons point of view and a new and exciting opportunity will usually pop up.