Need help in deciding what to develop - Brisbane

I have an inner city Brisbane site in a mixed use zone. The intention is to demolish the existing house and build something I will live as well as some additional residential or commercial space eg office/retail/cafe to lease to generate income. The site is 410m2, fairly flat and narrow ? about 9.5m wide which may make building difficult.

I?m after some advice on what to build for the income generating portion. The main limitation will be budget - from a town planning point I'm not really restricted, I can develop up to 8 storeys. I have never developed anything before so lack of experience plus budget will mean I will probably end up with something small. My budget for building something turnkey is about $900K (includes all professional, consultant and council fees).

I spoke with a real estate agent who gave me office rentals figures of $300 - $350psm/pa.

Brand new 1,2,3 bedroom units rent from $400, $500, $650 pw. Most of these places have pools and gyms which I will not be building.

My initial thoughts were to build a 3 bed place and a 2 bed place. At different stages of life, I will be able to move between the two or occupy the whole lot. I was also thinking to add an office space to use as a home office or to lease but not sure if I can afford this now. Im trying to figure what type of split is a good idea and how many m2 I should apportion to the commercial space. Or do I even build a commercial space? The end goal is to be able to live here and use the rent as retirement income.

Do I design and build only what I can afford now?

To try maximise land use, do I design something bigger now but stage the build? (To avoid having to go through DA more than once)

Am I wasting land potential and time by building something so small?

What should I be aware of if building commercial? It is more complex than residential? I know I may have to get a commercial loan but what are additional expenses go with commercial property that differ to residential, is everything going to cost more just because its commercial?

Any advice or comment appreciated
 
Just personally speaking ...if i had land that can be developed up to 8 stories but could not afford to with current budget.I would be very tempted to use budget on 2 townhouses in chermside /Alderley etc or 1 townhouse, 1 unit, live in one (rent out a bedroom if poss as well) rent the other and let CG grow a bit. After a while I would then look for DA for 6-8 stories and either sell with DA if not enough equity/security to build on the inner city block, or, build on it and lease/rent the whole lot out.
Otherwise, I would at least aim for 3 stories. Is it possible I wonder to build something that could be ready to go to add on extra stories as equity grew like they do in Cairo. I remember being amazed at all the houses with rods sticking out of flattop buildings. Apparently they add on stories as families get bigger and never complete the roof as once the building is 'finished' they pay more to the government :) just an out there thought :)

P.s. That out there thought got me thinking...yes, you can add another story (google inspired constructions ) if soil, foundations etc are all thought out and engineered at the beginning you can do 2-3 stories and add on at a later date. Bearing in mind any construction is going to interfere with current business/lettings during that time.
 
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I currently live on the site and love the location. I know being emotionally attached is not going to give me the best financial return but I want to continue living here and not sell it. This is also why I don't want to turn it into an apartment block, I don't want to be living so close to multiple neighbours in a unit.

Having commercial space appeals as the the space is occupied during business hours, no neighbours at night.

But I also need to think about if I fall out of love with the place, I'd still want it to be attractive to others. I think the key is flexible spaces. I really like the idea of being able to add extra storeys which kind of leads back to do I design something bigger now so I dont have to get all the consultants and DA involved again or test the waters with something smaller and reassess down the track?

I'm not sure how much additional effort/cost is required to get a DA for say 600m2 of mixed use vs 300m2 of mixed use.
 
I haven't suggested you sell it now, only further down the track with DA if it has outlived its use to you/cannot afford to develop full potential/want to invest elsewhere and so on.
I also didn't suggest you go resi on the stories though I did suggest you could rent a room of your own accommodation, to increase cash flow. That is entirely up to you.

I did suggest 2/3 stories now, though I suspect if you are going to pre plan for further stories you may only get 2 stories due to engineering costs for reinforced slab/foundations etc. it is up to you how you use them, be it commercial/resi etc though for commercial, if parking isn't available it may limit the market, I do not know where it is or who it would appeal to, just mentioning it.

I also suggested holding onto it, but investing elsewhere as there are still c. Gains to be had around Brissy and then at a later date using these other investments as security with separate loans to develop the inner city block at a later date.

These are only suggested as ways around being able to maximise a block that can go to 8 stories with a budget of 900k.

I am only aware of resi dev. Costs so cannot shed light on the commercial end but if you read through the comm. posts you might find some info.
 
Thanks Mitch for your comments and suggestions. I'm dumping my ideas and thoughts to get feedback and so it can be considered. I definitely will be looking have lots of carparking as I think its always going to be in demand.
 
development yield

Hi Cinder,

the block may be too small to be viable as is, mainly because you cant point a car opposite each other when you get down to traffic engineering requirements.
Would also be difficult getting the full 8 levels with the smaller footprint gfa.

E.g. if you could squeeze out 9 units and a neighbour could do 9 as well....

together you would probably get 25.

I think a great idea to look at the neighbours for maximizing your returns in JV.

if not, build a small unit block with your penthouse on the top.

Live in the PH, you get garden , open space and no neighbour. Also it is the profit that is not realized... therefore pretty much tax free.
Be the body corp and rent out all units to pay your mortgage.
The entire asset grows yearly, you are ok.

Da cost will be around 70-80k , you go for maximum yield gfa and council will determine the outcome.

Cheers
Derek
 
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