land banking subdivision..who pays for services?

[muney]

hi all,

just wondering about people who land bank and then develop the land into blocks..who pays for all the main services such as bringing the sewer to the block and roads (not internal) external??
does the water board take care of bringing the sewer to the site and what about external roads..is that a council funded thing??
i understand all the internal network of services will be bourn by the developer..can any developers comment..would appreciate some guidance

 

[lizzie]

nope - in nsw the developer pays. if you need to extend the mains sewer onto your property, ie, if the mains ends on your block and you subdivde off the end away from the main you have to extend the mains onto the new block before subdivision is approved ... or if your are running a line off the main sewer to the new property, ie, if the mains is on the other side of the street from your property you have to pay for your line to be run under the street to your block ... you have to pay for the work to be done by a water board approved plumber/contractor.

can add up - i'm looking at a bill not much shy of around $20-30k for the latter this year, and had to do the former for a two block subdivision a few years back.

 

[muney]

what about if there was a dual carriageway road proposed to go through the property..do the council/roads authority pay for this?

 

[lizzie]

hmmmm - don't know that one. i'd suggest you ring council in the morning and ask the duty officer.

 

[manny]

Hi Muney,

here in Melb a few years back, when the services & roads reached our block (residential), we were up to pay (pretty much contribute towards) for everything, including roads, footpath, electricity, Melb Water (sewage/water), etc... Back then it was costly & you had the option to pay later if you couldn't come up with the money (annual contribution you can pay with your annual rates)... Although it was costly, it does benefit you anyway, as your land is then far more attractive (sealed roads, subdividable, etc.)...

Cheers,

Manny.

 

[Ross Sondergeld]

Gold Coast - $60k per block to develop (4/06)

Hi...


To give you an idea on a small subdivision...

It costs about $60,000 per block on average to subdivide a 100 lot subdivision on the Gold Coast. (Roads, sewage, water, contributions, etc)

SIMPLE NUMBERS -
Subdivision = 100 blocks
Raw land = $60,000
Cost to develop = $60,000
Other costs = $20,000
Cost to produce = $140,00
Sell for $180,000 each
Profit = 40/140k = 28.5%

Note - The above is a guide only. A 20%+ margin is an acceptable return.


Ross on the Gold Coast

 

[juzz]

Muney,

Lizzie would be correct probably 99% of the time.
Depending on your deal with the council???How much does the council want it-(the proposed development) sometimes they have a foot/cut in the deal
and sometimes in some areas councils can do more than you think- they may have an equity stake.(Qn are any of your Partners on council??)
But thats rare.
Usually if you are JV partner in the Land bank/development you'll be footing the bill for everything (internal and external) plus some.

I'd be looking into the implications of the proposed dual carriageway.
This would be a major concern and have major impact implications on what your planning to do.As we all know things may change in the future.

If its not already done, tie up the easement/ title requirements of this ASAP as sometimes future plans may change????

Juzz