Property Development - Duplex

[YoungGun]

I wish to purchase land with the purpose of building duplexes.

I understand that I need to apply for DA, however what are the basics of knowing that a piece of land 'can' have multiple dwellings?

- How do I find out what the area is zoned for?
- Do I need minimum sized blocks/frontages?
- Can I assume if a particular street has duplexes already and my land size/frontage etc is similar that my D.A will be approved?

My goal is to use this as an educational tool for developing and building and obviously make a profit or at least break even in this risky game

 

[gfreer]

Why would you go into business to break even? That sounds like making a loss with a negatively geared property in the expectation of capital gain over time.

Although some of the early NRAS properties were overpriced, the duplexes now being offered in so called 'muscle' towns seem well priced ...and cashflow positive. But then I don't like exposing my clients to risk. Risk is mitigated by having construction done by an experienced builder in a location with identified growth drivers.

 

[vicplanner]

Dont risk it

The development game is not something for someone who is new to investing and/or has limited experience in development. I am a town planner and have seen many uneducated and even highly educated developers go completely bust and/or loose large sums of money even on one development.

Given that the current property market is unstable, looking at doing your first development with little knowledge in the industry is a really crazy move at this time. Only yesterday i met with a builder who has worked out even with development approval for four three bedroom, two bathroom apartment approved will still most likely loose 70 thousand. And he will be building them himself. However it is likely that the development will be approved for two three bedroom and two, two bedroom dwellings, which he expects to increase his losses.

I am not saying that development is a horrible industry, i just think if that is what you are looking at doing, seek advice from a planner first. There is no quick answer to learning about planning schemes/planning and environment act (if in vic).

On a side note, i think smaller development sites in victoria have almost done there dash. By smaller i am talking about a unit to the rear, or two side by side townhouses. I am not saying its always the case, but from my personal experience four unit + development sites are far more feasible (generally) to develop.

 

[Aaron_C]

I agree with vicplanner. It's an expensive thing to get wrong as one of your first investments.

 

[Melbournian]

exactly right - you need a good support network (bankers, architects, builders, suppliers etc) otherwise you're threading in dangerous waters.

unless you loaded and just wanting the experience.

 

[Ideo]

There are town planning consultants out there who can undertake feasibility studies based on those factors to give you an idea of potential yield.

There are many variables. And, with 152 council areas in the state there are many, many, many different controls.

I cannot provide you with an easy answer because their are none.

If you are serious speak with a planning consultant..

 

[veseli]

- How do I find out what the area is zoned for?
You will find that in LEP and DCP Development Control Plan booklet from the Council.

- Do I need minimum sized blocks/frontages?
Yes, every council is different, you will find that info in DCP.

- Can I assume if a particular street has duplexes already and my land size/frontage etc is similar that my D.A will be approved?
No, that doesn't mean anything, it could be an indication only, but there are many factors involved.

Note:
Look for corner blocks, and new estates, most likely if you buy a land in a developed estates you will not make any profit, empty land is always cheaper solution then buying an old house and knocking it down.

 

[Ideo]

- How do I find out what the area is zoned for?
You will find that in LEP and DCP Development Control Plan booklet from the Council.

- Do I need minimum sized blocks/frontages?
Yes, every council is different, you will find that info in DCP.

- Can I assume if a particular street has duplexes already and my land size/frontage etc is similar that my D.A will be approved?
No, that doesn't mean anything, it could be an indication only, but there are many factors involved.

Note:
Look for corner blocks, and new estates, most likely if you buy a land in a developed estates you will not make any profit, empty land is always cheaper solution then buying an old house and knocking it down.

But note that even if you do not comply with the minimum lot size under a DCP these are a plan rather than a legislative document.

If you have a minimum lot size under an LEP and your property is smaller than this you will need to do a SEPP 1.

 

[YoungGun]

Lots to consider - thanks for the replies.

In response to the replies.

gfreer - I am going into business to make profit, I do not want to lose money however you have to start somewhere, even if its small. I do have an IP, looking at my next IP however I'm thinking to purchase land & build 2 units with potential to hold both or sell one and rent the other.

vicplanner - thanks for the advice, I'm finding it a lot harder to find solid development information, compared with the loads of information, books and seminars available for using property as an investment vehicle.

veseli - Thanks for direct response to my questions.

I understand this game his risky as mentioned in my first post, however I'd much rather give things a go, with solid research first then to sit and my hands and look back in 10 years and wonder.

A little more information about myself.... I am a project manager (civil engineer), currently looking at my 2nd IP and figure I may as well build it myself. I currently work in commercial construction and run multi million dollar projects. I am no developer, nor am I a residential builder.

I am beginning my builders licence course shortly as I will get exempt from a lot of modules due to my experience and bachelors degree. I need to build capital and I also need to understand the development process prior to doing my own development & building - if I decide its for me. I feel as though I want to go through the development process (DA/finance/design etc) then manage someone else to build it for me even doing it myself. I understand the headaches of construction and managing subbies but smaller residential subbies are much different to the subbies I deal with.

Maybe I am going about my goals the wrong way, however I have a strong construction background, no house building experience so I feel this is the path to take to educate me prior to the 4unit + + projects.

My next step is talking to a council and then a town planner. Can anyone recommend and ballpark how much will this cost per consultation?

 

[RumpledElf]

Talking to the council *should* be free, our local council is great but you really do need to book them in advance, you can't just pop in for a chat.

I wouldn't mind building a duplex ... there's quite a few new ones peppered around the place but it has to be the right zoning. Our main street, for example, is quite long and has 3 different kind of zones on it - residential, commercial and home industry, and the 'home industry' one is the one you have to watch as it rather seamlessly merges with the residential areas and is hard to pick without a town plan. It has much, much wider minimum frontages, larger setbacks, considerably larger minimum areas, and despite most of the blocks being 100m+ deep you can't do hammerhead subdivisions, which IMHO is a serious waste considering most of the blocks on that stretch tend to fence off the back 50 or 60m of their blocks and put a sheep on so they don't need to mow.

Existing houses if they're older you can pretty much ignore, they tend to predate zoning rules. For example, the street I live on is largely made of 14m wide blocks dating back to the late 1800s, and the minimum frontage now is 15m. Heck, my neighbour's frontage is only 11m.

 

[josko]

- How do I find out what the area is zoned for?
You will find that in LEP and DCP Development Control Plan booklet from the Council.

- Do I need minimum sized blocks/frontages?
Yes, every council is different, you will find that info in DCP.

- Can I assume if a particular street has duplexes already and my land size/frontage etc is similar that my D.A will be approved?
No, that doesn't mean anything, it could be an indication only, but there are many factors involved.

Note:
Look for corner blocks, and new estates, most likely if you buy a land in a developed estates you will not make any profit, empty land is always cheaper solution then buying an old house and knocking it down.

Re: Land sizes and what you can build on the land, ring the local Council. You will also find information on your local Council's site for example:
http://www.hornsby.nsw.gov.au/planning-and-building

You should be able to find a zoning map and most of the info you require on these sites.

Talking to a Town Planner is free> Ring up a few local TP's and get a few quotes. Don't always go for the cheapest one. Actually, Google is good and you can perhaps read references and experience.

Regards JO

 

[Bhp19]

But note that even if you do not comply with the minimum lot size under a DCP these are a plan rather than a legislative document.

If you have a minimum lot size under an LEP and your property is smaller than this you will need to do a SEPP 1.

Ideo, who would be the first port of call when wanting to develop a block smaller than the minimum stated in the LEP?
We have an 800m2 block in an area where council says the minimum development site is 900m2 but there is a duplex one street away which I've found out is on 813m2!

Can I use this as a precedent and if so who should I be speaking to?

 

[matto_]

Local planner/land surveyor - or the council themselves should be able to help you.

 

[Aaron_C]

Hate to say it but council planners are very unhelpful.

 

[Ideo]

Ideo, who would be the first port of call when wanting to develop a block smaller than the minimum stated in the LEP?
We have an 800m2 block in an area where council says the minimum development site is 900m2 but there is a duplex one street away which I've found out is on 813m2!

Can I use this as a precedent and if so who should I be speaking to?

It's a complex situation.

State Environmental Planning Policy 1 (SEPP 1) does allow for variation to development standards. The general rule is 10%, but it is not set in concrete. If there is a strong argument you can get a much larger variation - e.g. I have done a boundary adjustment to reduce the size of a lot to 50% of the minimum in a rural zone because of a strong planning argument.

Precedent can be useful, but is not a certainty.

Once you start getting into variations to standards it is something you need to speak to a professional about. It's not a simple lodge yourself job.

In terms of metro councils, Hornsby is one of the better ones for dealing with. If it was Ku-ring-gai I'd basically say don't bother.

First step would be to engage a consultant town planner and look at doing a pre-DA meeting with Council to discuss the proposal and see whether they would consider supporting such a variation or whether it is an outright no.

 

[Bhp19]

Ok, thanks very much for the responses, most helpful.

 

[Bhp19]

One more thing Ideo, when you say a strong argument to get a variation do you just mean a well presented design meeting or exceeding all of council's standards?

Can you please elaborate a bit of me?

Thanks.

 

[jweg]

Toowoomba Duplex

It has recently gotten easier to build a duplex or two standalone units in some areas of Toowoomba. To encourgae development & reduce red tape, and also to assist with affordability, the local council has created a "Residential Choice" Zone in which you can built 2 units or a duplex -- no DA, No uprfront fees just a standard building application & permit.

Any other areas doing this?

 

[Ideo]

One more thing Ideo, when you say a strong argument to get a variation do you just mean a well presented design meeting or exceeding all of council's standards?

Can you please elaborate a bit of me?

Thanks.

A strong argument from a planning legislation perspective. This depends a lot on context, historical development patterns, unique site attributes, design etc etc. A SEPP 1 Objection is essentially a stand alone document within the overall DA package.

A simple argument based on "well it's kinda close and I want it" doesn't cut it for variations to legislative controls.

jweg. Doesn't apply to NSW - would make our lives easier if it did.

 

[grantwhit]

www.legislation.nsw.gov.au/
browse> EPIs you shoukd find all the leps and maps you need for nsw councils