Property Development

[John Hosie]

Hi,

Though I've been using the software for a couple of years, this is my first time on the forum.

I'm in the planning stages of developing my own home block. I will lose my CG free advantage of selling my own home, but can put 4 houses on the block where 1 now stands.

It means bulldozing a nice 4 BR brick home and filling in a $30,000- pool, but the maths still puts me out in front.

By my rough calculations I should, at the end of the development, be able to sell 2 houses, and own 2 outright. I can then live in 1 and sell at a later date to relocate to northern NSW, (my dream), avoiding CGT, and keeping 1 rental, which will improve cash flow and enable further investment. (I already have 2 IP's doing quite well in SE Qld).

Has anyone done this sort of development, and what traps should I be looking out for?

Any guidance will be highly appreciated!

Thanks, Hose

 

[Scott Graham]

Hi John,

Have you checked out the costs of subdivision?

It isn't cheap.
You might be suprised how much you need to spend just to divide the land.

Kind Regards,

Scott.

 

[John Hosie]

I've got council costs, surveying costs, architect costs and building costs factored in - and it still looks rosie. Just worried that it looks too easy?

 

[frehnejc]

See this example by Michael Yardney http://www.metropoleprojects.com.au/pdf/UnitFeasibility.pdf
This may provide some additional information. The software that generates these figures is Devfeas (www.devfeas.com.au).

 

[urban cowboy]

Hi John,

sounds like you've done you homework - good luck with it!!!

have you factored in holding costs and delay costs?? there is a major shortage of tradies in Brisbane at the moment and even materials are hard to find as there is so much construction going on AND many workers/materials are being siphoned off by the mines.

the only other things i can think of that may affect you (if you haven't thought of them already) are extra council costs like added headworks/contributions/ecologists/engineers etc should there be any issues and things like agents and advertising fees for the ones you sell off - depending on which way you go

in other words - make sure you have access to enough cash reserves for when things go a bit skewed or some council champion who decides to slap you with more fees or issues.

perhaps you could start a thread with progress reports and piccies once you get started?? we'd all love to watch your progress...

cheers
UC