Mum wants to build a duplex.

Hi all!

My mum, who is in her early sixties, wants to knock down her 30 year old house in Baulkham Hills (NSW) and build a duplex. I don't think that the council will allow her to cut the block in two, but will allow either a duplex or two townhouses on the one title.

I'd like to keep it as simple as possible; the title of the house in currently in mum's name - if she can finance the lot, she could then have a separate income stream from the other half of the duplex.

Here are some of the finer details:

* $180k is still owning on the house (mum split with dad)
* Block size is 970sqm (about) on a corner block on Merindah Road, for those who know Baulkham Hills.
* Mum is still working permanent-part time, but not sure for how much longer.
* House would be valued about $500k today, give or take ~ $30k
* An 80% lend against the existing house would only give her $220k in equity to use.

I guess I want to get some ideas as to whether this all sounds feasible, and, if mum can't do it off her own bat, how myself or my brothers can chip in and help, ie joint venture agreement? Would council actually allow the block to be cut up?

Opinions greatly welcomed. :)

Cheers!

-- MJ.
 
Hi all!

My mum, who is in her early sixties, wants to knock down her 30 year old house in Baulkham Hills (NSW) and build a duplex. I don't think that the council will allow her to cut the block in two, but will allow either a duplex or two townhouses on the one title.

I'd like to keep it as simple as possible; the title of the house in currently in mum's name - if she can finance the lot, she could then have a separate income stream from the other half of the duplex.

Here are some of the finer details:

* $180k is still owning on the house (mum split with dad)
* Block size is 970sqm (about) on a corner block on Merindah Road, for those who know Baulkham Hills.
* Mum is still working permanent-part time, but not sure for how much longer.
* House would be valued about $500k today, give or take ~ $30k
* An 80% lend against the existing house would only give her $220k in equity to use.

I guess I want to get some ideas as to whether this all sounds feasible, and, if mum can't do it off her own bat, how myself or my brothers can chip in and help, ie joint venture agreement? Would council actually allow the block to be cut up?

Opinions greatly welcomed. :)

Cheers!

-- MJ.
See an experienced broker for the finance side of things.
Block can be strata subdivided if needed to sell one off later on when the dual occupancy is completed.
Go and chat with a senior planner at council to get feedback for the proposal. Study the council DCP under residential development/dual occupancy to check that the site complies.
Ensure that you can drain all stormwater to the street. You will probably need to undertake stormwater retention system that needs to be designed by engineer.
Is the block flat? (cheaper to construct)

All I can think of for now - gotta go. :)
 
See an experienced broker for the finance side of things.
Block can be strata subdivided if needed to sell one off later on when the dual occupancy is completed.
Go and chat with a senior planner at council to get feedback for the proposal. Study the council DCP under residential development/dual occupancy to check that the site complies.
Ensure that you can drain all stormwater to the street. You will probably need to undertake stormwater retention system that needs to be designed by engineer.
Is the block flat? (cheaper to construct)

All I can think of for now - gotta go. :)
Hi Rockstar,

Thanks for the feedback; the house footprint is flat, but the block slopes up from the street from both corners. Maybe I should get some photos uploaded....

I'll do some homework with council. :)

-- MJ.
 
minimum allotment size for BH: 700 per dwelling, therefore cannot subdivide

But for dual-occ, minimum size is also 700, so can do this. Added benefit of corner block with the council like for dual-occ as each dwelling can fac a different street.

Also watch the gradient, more than 20% makes it "generally not suitable for development"

I also have a corner block on the BH / CH border of 697m2, 3m2 under their current guidelines for dual-occ.
 
Hi farmilor,

Thanks for your comments. My comments inline.

minimum allotment size for BH: 700 per dwelling, therefore cannot subdivide
Figured as much. :rolleyes:

But for dual-occ, minimum size is also 700, so can do this. Added benefit of corner block with the council like for dual-occ as each dwelling can fac a different street.

Also watch the gradient, more than 20% makes it "generally not suitable for development"

I also have a corner block on the BH / CH border of 697m2, 3m2 under their current guidelines for dual-occ.
Could you clarify what you mean by "3m2"?

Cheers!

-- MJ.
 
Hi all!

My mum, who is in her early sixties, wants to knock down her 30 year old house in Baulkham Hills (NSW) and build a duplex. I don't think that the council will allow her to cut the block in two, but will allow either a duplex or two townhouses on the one title.

I'd like to keep it as simple as possible; the title of the house in currently in mum's name - if she can finance the lot, she could then have a separate income stream from the other half of the duplex.

Here are some of the finer details:

* $180k is still owning on the house (mum split with dad)
* Block size is 970sqm (about) on a corner block on Merindah Road, for those who know Baulkham Hills.
* Mum is still working permanent-part time, but not sure for how much longer.
* House would be valued about $500k today, give or take ~ $30k
* An 80% lend against the existing house would only give her $220k in equity to use.

I guess I want to get some ideas as to whether this all sounds feasible, and, if mum can't do it off her own bat, how myself or my brothers can chip in and help, ie joint venture agreement? Would council actually allow the block to be cut up?

Opinions greatly welcomed. :)

Cheers!

-- MJ.
Sorry but I have to say that the whole equity in the house statement doesn't make sense to me because if you are going to demolish the exiting house, the house is then worth $0. Your equity would be in what the LAND is worth and that's after what you owe on the existing loan.

The existing house may be flat but if the plan is to build two townhouses then one of them may be on a slope which will mean that there will be either cut and retaining wall or a bearers and joist subfloor build with neither are cheap (again depending on the slope).

There is so much more to it I think and def. speak to some professionals. The fact that your mum is in her 60's means she is in retirement age so that will impact lending also also affordability due to her being part time only and not working for too long during the future.

Also, find out roughly what the building costs will be. Building costs are a tough one, and no one on the net can give you an estimate as with building I think there are alot of variable as well as the saying of how long is a piece of string. Lets just say hypothetically $600k for construction costs, can your mum pay the mortgage on that as well as the $180k owing?

Speak to town planners, council, builders, drafties, mortgage brokers etc to get a fair idea on what is required and projected costs.

If you and your siblings can help your mum, that sounds good but what would your return be in the investment and would you be ok if you see nothing until down the track? You may have to be on the title as some backs require that for a JV. Don't take my word for it, but in my experience similar to that it was the case. That would mean stamp duty would be payable. If you are going down that road, wait until the house is demolished to re valuate and sign the papers. The land alone will always be worth less than a land with the house on it, thus less stamp duty payable.


Edit: I know that the construction costs that I have quoted are high. but I have based that on complete costings for which I have experience and knowledge in. That means high quality, located in blue chip areas and built by a custom builder. I don't doubt that there are cheaper building costs out there but i'm not familiar with those build finishes nor price. I have heard of some project builders in NSW doing those sort of projects but know in VIC that no project builders do multi unit builds.
 
Did I miss something or ... has noone asked where your mother is going to live - and store her stuff -if she goes ahead and demolishes her house to build?

From what I can figure, building isn't always a short process.
 
Did I miss something or ... has noone asked where your mother is going to live - and store her stuff -if she goes ahead and demolishes her house to build?

From what I can figure, building isn't always a short process.
Hey'ya RumpledElf,

Yes - she would live with my wife and I for the duration of the building process. Oh, and my two brothers as well. We are renting a 4 bedroom house at the moment. :)
 
Hi Minx,

Thanks for your valuable input! Comments inline.

Sorry but I have to say that the whole equity in the house statement doesn't make sense to me because if you are going to demolish the exiting house, the house is then worth $0. Your equity would be in what the LAND is worth and that's after what you owe on the existing loan.
If she could draw on the existing equity in the house (and she'd only do this if she could finance the complete build), then get the house revalued and her account topped up to 80 or 90% LVR.

Or would banks have a grave issue with this, considering you're knocking down their security? :)

The existing house may be flat but if the plan is to build two townhouses then one of them may be on a slope which will mean that there will be either cut and retaining wall or a bearers and joist subfloor build with neither are cheap (again depending on the slope).
I think that there would be enough floor area to have the duplex built on the flat part of the land, with some private open space on the sloping areas near the boundary. I need to get some photos of the site on here. A picture is worth a thousand words. Or so.

There is so much more to it I think and def. speak to some professionals. The fact that your mum is in her 60's means she is in retirement age so that will impact lending also also affordability due to her being part time only and not working for too long during the future.
Yes - this is one of my concerns, but I think she'll easily be working well into her 70's. She's a nurse. Tough as guts too... :rolleyes:

Also, find out roughly what the building costs will be. Building costs are a tough one, and no one on the net can give you an estimate as with building I think there are alot of variable as well as the saying of how long is a piece of string. Lets just say hypothetically $600k for construction costs, can your mum pay the mortgage on that as well as the $180k owing?
If my wife and I live in one half of the duplex, then we'd be paying rent to mum.

I've got two rough quotes from different builders. One is from Masterdon homes, but they're pretty much cookie cut. Any variations would be expensive. The other was from PlanIT homes. They essentially do a custom build for each site.

The Masterdon one was $437k, without all the extras to finish a home off like letterbox, aircon, floor coverings, window coverings, dishwasher, landscaping and so on.

The PlanIT one is about $1000 per square meter. The duplex for both builders were about 220sqm for each half. Two storey. 3 bed, 2 bath, 2 garage for each side.

We also have to consider:

* Section 94c contributions - about $8800 for each "lot" in Baulkham Hills.
* Engineers report on whether the existing sewerage systems are adequate
* Demolishment of the existing house - up to $10k

Speak to town planners, council, builders, drafties, mortgage brokers etc to get a fair idea on what is required and projected costs.

If you and your siblings can help your mum, that sounds good but what would your return be in the investment and would you be ok if you see nothing until down the track? You may have to be on the title as some backs require that for a JV. Don't take my word for it, but in my experience similar to that it was the case. That would mean stamp duty would be payable. If you are going down that road, wait until the house is demolished to re valuate and sign the papers. The land alone will always be worth less than a land with the house on it, thus less stamp duty payable.
That's a good idea - if it were to become a JV, we'd need some damn fine professional advise to start with, followed by a JV agreement and some structures in place.

Edit: I know that the construction costs that I have quoted are high. but I have based that on complete costings for which I have experience and knowledge in. That means high quality, located in blue chip areas and built by a custom builder. I don't doubt that there are cheaper building costs out there but i'm not familiar with those build finishes nor price. I have heard of some project builders in NSW doing those sort of projects but know in VIC that no project builders do multi unit builds.
I think construction of a duplex would cost no more than $500k complete. I'll get some figures together. :)
 
I would be talking to masterton homes or another one of the larger home builders in sydney as they have a great buying power and can build for cheaper.
with the finance side of things speak to a finance broker you maybe able to get a loan that is calld a Building and construction loan witch will take into account what she is building and all the other factors and lend the money to build the Duplex. Masterton homes may actually offer this as im sure alot of the people buying new homes will need finance.
 
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