Hi guys
This is my first post on this forum, and also my first to develop my IP, but I simply not sure which is my best option.
Here is my case. I have a R25/40 block of land in Kelmscott sized 1012 sqm with an existing house at the front. I have checked with builder and I can build two 3x2 at the back while retaining the front house. However my funds are limited so I was planning to sell off the front house first so that I can gather enough funds to develop two houses at the back at the same time (My funds while holding the front house can only support one house development and I can use the funds for just 15 months only).
And here are my options:
1. Develop two houses at the back, renting out the front house during the process, and sell all three houses in 15 months (recommended by builder)
My builder recommended the following process:
The entire process is around 15 months in total.
The builder explains that this is the most cost effective and quickest way to build and subdivide, HOWEVER, they need to see I have enough funds to cover the entire construction before they begin a single thing... which I don't have until I can sell the front house first. Estimated ROI: 25%
2. Subdivide first, and then build
Second option is I engage a surveyor to apply the subdivision for the block first, which will cost me around $50K each for the two back lots for power, water, sewage, etc, and may be $10K for the front existing house for power, sewage, carports and driveway. This will take around 6 months until WAPC conditionally approved and another 1 or 2 months to obtain the Survey Strata titles for each lots.
While waiting for WAPC first conditional approval, I engaged builder to draft up all the drawings for the rear houses.
Once titles have been issued, I can then consider one of the following option:
1. Sell the front house and recover enough funds to show the builder so that they can begin the the process - building permits from council, construction, etc. This will take another 12 to 14 months. The entire process will take roughly 18 months
2. Sell the front house, and sell the rear two blocks together with the drawings only. This way make less profit, but less work, less overheads cost, and it just takes less than one year (8 months to subdivide, assuming 3 months to sell all three) to recover all money and begin with another project.
Less than a year for whole process ROI: 22%
Any ideas or suggestion for what I should do? This is my very first project and I prepared to learn things from it while still hoping to make some profit out from it.
Thank you all.
Regards
Dennis
This is my first post on this forum, and also my first to develop my IP, but I simply not sure which is my best option.
Here is my case. I have a R25/40 block of land in Kelmscott sized 1012 sqm with an existing house at the front. I have checked with builder and I can build two 3x2 at the back while retaining the front house. However my funds are limited so I was planning to sell off the front house first so that I can gather enough funds to develop two houses at the back at the same time (My funds while holding the front house can only support one house development and I can use the funds for just 15 months only).
And here are my options:
1. Develop two houses at the back, renting out the front house during the process, and sell all three houses in 15 months (recommended by builder)
My builder recommended the following process:
- 1. Apply Build Strata and building permit from council - around 6 months
- 2. After 6 months, start the construction
- 3. After all bricks work completed, lodge application of subdivision to WAPC and wait for 3-6 months, but construction is still under progress at the same time such as roofing, paving, etc.
- 4. Continue construction
- 5. After 3 months, WAPC issued conditional approval for subdivision when the entire construction is almost completed
- 6. Completed the required conditions requested by WAPC such as carpets, cloth lines, landscaping, etc.
- 7. Obtain all required clearances and lodge to WAPC for final approval, and wait for Landgate to issue individual Survey Strata titles for all three lots.
- 8. Sell all three houses
The entire process is around 15 months in total.
The builder explains that this is the most cost effective and quickest way to build and subdivide, HOWEVER, they need to see I have enough funds to cover the entire construction before they begin a single thing... which I don't have until I can sell the front house first. Estimated ROI: 25%
2. Subdivide first, and then build
Second option is I engage a surveyor to apply the subdivision for the block first, which will cost me around $50K each for the two back lots for power, water, sewage, etc, and may be $10K for the front existing house for power, sewage, carports and driveway. This will take around 6 months until WAPC conditionally approved and another 1 or 2 months to obtain the Survey Strata titles for each lots.
While waiting for WAPC first conditional approval, I engaged builder to draft up all the drawings for the rear houses.
Once titles have been issued, I can then consider one of the following option:
1. Sell the front house and recover enough funds to show the builder so that they can begin the the process - building permits from council, construction, etc. This will take another 12 to 14 months. The entire process will take roughly 18 months
2. Sell the front house, and sell the rear two blocks together with the drawings only. This way make less profit, but less work, less overheads cost, and it just takes less than one year (8 months to subdivide, assuming 3 months to sell all three) to recover all money and begin with another project.
Less than a year for whole process ROI: 22%
Any ideas or suggestion for what I should do? This is my very first project and I prepared to learn things from it while still hoping to make some profit out from it.
Thank you all.
Regards
Dennis