Is spending more on larger building floor area worth the return

[thydzik]

Members,

I am about to develop a block with a triplex of 3x2 houses in Western Australia.

I have the option of building roughly 100sqm of living or I can increase this to 120sqm for roughly $10,000 extra.

Will this 20sqm extra for roughly $10,000 return this and more in final sale price?

I have tried looking at sold properties in the same area but it is really hard to see any conclusive evidence as any price fluctuation could be due to any other number of other factors.

With the current economy do buyers even care about the house size or just want something affordable?

What are your thoughts?

 

[Aaron_C]

An extra $10,000 for each house's 20 sqm extra? Or $10,000 for extra 20sqm in each house?

 

[thydzik]

An extra $10,000 for each house's 20 sqm extra? Or $10,000 for extra 20sqm in each house?

$10,000 for extra 20sqm per house

 

[Jtkumnick]

20% more space for __% more expense?

To be able to increase the space by that much seems quite good to me but I dont know your target market and local prices.

 

[thydzik]

20% more space for __% more expense?

To be able to increase the space by that much seems quite good to me but I dont know your target market and local prices.

ahh, good point
100sqm would be roughly $130,000, so
120sqm would be roughly $140,000

 

[Aaron_C]

100sqm seems pretty small for a 3x2 house....but I don't know the market in the area you are building. What is the max price that people pay for a 3x2 house in those areas? and how big are they?

 

[CHam]

20% more space for 7.7% more space seems reasonable.

However if you only get $5 or even $10k more in resale it isn't worth it. Need to check what other units of comparable size are selling for to come to a reasonable decision.

 

[knightm]

As above it depends on the specific market and whether they will pay for the extra but in general if I had a chance at construction costs of $500 per metre I would take it. Its not gonna get any cheaper! If you extended later it would cost 3-4 times that.

 

[redwing]

100sqm seems pretty small for a 3x2 house

The In-Laws are in a retirement villa with 100 sqm of living, so for a family home I also think it would be pretty small?

 

[neK]

If you can add an extra bedroom then why not