R40 - 776 sqm block

[MTR]

Hi All
Need some ideas see if I am on the right track.

Just purchased R40, nice rectangular block, City of Melville.

My first thought was to build 3x2 villas, very vanilla, but the sums stack up nicely.

Then, I thought what if I went with apartments, I have no idea how many would fit on the block, can anyone give me an idea on this??

The logic behind this one was purely cash flow play, keep all of them, as I would achieve high rents in this area.

Build 2 bedders @80 sqm each x 1800 build cost per sqm ($144,000) each
Headworks?? no idea

Anyone like to contribute to this, I need some help as apartments new to me.
Also, I am not too keen on 1 bedders unless its inner city.

Thanks

MTR

 

[Sabretooth]

I have similar block in Mandurah, planning on putting 6 3x2s and 1 3x2. All good sized, well planned apartments, same zoning. Mandurah has parking concessions, 1 bay per unit allowed.

Apartments are class 2 building though, so may incur additional expenses including engineering, fire protection and sound insulation.

 

[UrbanPlanner]

I could be wrong but I think the cost per sqm is closer to $3k for a decent spec.

In terms of the number of apartments, you?re simply bound by plot ratio so how you chop it up is up to you. Plot ratio is 0.6 @ R40, so 465m2 of apartments. Based on 80m2 for a 2-bedder this works out roughly to 5.82. Melville are quite good to deal with so i think you could comfortably push it to 6 x 80m2 apartments and seek a minor plot ratio variation. The big factor for a lot of these types of developments is parking ? the R-Codes requires 1 per unit, where you?re near a high frequency public transport route, or 1.25 per unit if you?re not.

Hope that helps a little bit.

 

[MTR]

Never expected to fit that many on my block? OK, now that is sounding very interesting.
Have you got costings an idea on this??

Thanks
MTR

 

[Aaron Sice]

Hi MTR - your $1800sqm would be overall - incl balconies, stores, landings, foyers etc. just on dwelling size it can be as much as $2500sqm, but generally around the 2200 mark.

Separate carbays are about $800sqm.

i find it's about $200k per dwelling turn key for a 2x2, including everything (headworks, landscaping, fencing, flooring, blinds etc) on a nice, simple block. i try to keep it under this figure but sometimes it's the little things that sting you, like crimsafe screens for fire ratings etc.

On 776, you multiply that by 0.6 - so 465m? of plot ratio.

That is about six good sized 2x2s or eight 1x1s. I never recommend odd numbers because the building cost goes up exponentially unless you can do a 3 storey; because you generally end up hanging bits out over areas and building over carbays etc.

just keep that plot ratio under 75m? and you can get away with one car per dwelling currently, so about 68-70m? on the title and do a bigger balcony to compensate.

you need one visitor bay per four or part thereof - so six or eight will require 2 visitor bays.

UP is right - Melville are AWESOME to deal with if you are proposing a mild underdevelopment or a good quality design - they dont take kindly to dogboxes and poor design.

 

[Aaron Sice]

sabretooth - glad you updated because the first thing i was going to say was you need min 1.5m to get away with a crimsafe screen...

 

[Sabretooth]

Yeah thanks block is R60 too so I took the post down. Apologies.

 

[MTR]

Yeah thanks block is R60 too so I took the post down. Apologies.

No need to apologise.

 

[MTR]

Hi MTR - your $1800sqm would be overall - incl balconies, stores, landings, foyers etc. just on dwelling size it can be as much as $2500sqm, but generally around the 2200 mark.

Separate carbays are about $800sqm.

i find it's about $200k per dwelling turn key for a 2x2, including everything (headworks, landscaping, fencing, flooring, blinds etc) on a nice, simple block. i try to keep it under this figure but sometimes it's the little things that sting you, like crimsafe screens for fire ratings etc.

On 776, you multiply that by 0.6 - so 465m? of plot ratio.

That is about six good sized 2x2s or eight 1x1s. I never recommend odd numbers because the building cost goes up exponentially unless you can do a 3 storey; because you generally end up hanging bits out over areas and building over carbays etc.

just keep that plot ratio under 75m? and you can get away with one car per dwelling currently, so about 68-70m? on the title and do a bigger balcony to compensate.

you need one visitor bay per four or part thereof - so six or eight will require 2 visitor bays.

UP is right - Melville are AWESOME to deal with if you are proposing a mild underdevelopment or a good quality design - they dont take kindly to dogboxes and poor design.

Thanks All for info, much appreciate this.

Hi Aaron
This is awesome info, that gives me the numbers so I can work out what way to go.

The limited contact I have had with Melville so far has been very good.

No apartments in this area, and I think you know the area I am talking about so no comparable sales, makes it difficult. But I think apartments would be ideal in this area, hope City of Melville feel the same way.
Like to see what you can do on this site down the track.

Cheers
MTR

 

[westminster]

Looks like UP and Aaron have given you some good advice.

I'd estimate $1.2m with my back of the envelope figures for 6 apartments but it really does depend on the block shape and location (for parking bay numbers)

Let me know if you want to catch up and we can run through it.

 

[Aaron Sice]

^^^ my figures are about the same for a six pack development, little bit more ($1.45m) for an eight-pack of 1x1s.

still prefer six, though - the area MTR is talking about isn't well known for apartments.

 

[WesternRat]

congrats on the purchase - you guys are buying left right and center. i need to purchase another one soon, there'll be none left!!

but aren't you meant to do these feasibility calcs before putting your cards on the table and signing the sales contract?

 

[mrdobalina]

but aren't you meant to do these feasibility calcs before putting your cards on the table and signing the sales contract?

You can do an offer subject to due diligence.

 

[Blair007]

congrats on the purchase - you guys are buying left right and center. i need to purchase another one soon, there'll be none left!!

but aren't you meant to do these feasibility calcs before putting your cards on the table and signing the sales contract?

I think numbers already work for a basic 2 lot survey strata, but if doing multis nets a bigger profit then why not

There's quite a lot of apartments in coolbellup area Marisa, maybe these could be used as a rough comparable..?

 

[MTR]

congrats on the purchase - you guys are buying left right and center. i need to purchase another one soon, there'll be none left!!

but aren't you meant to do these feasibility calcs before putting your cards on the table and signing the sales contract?

I am guilty, perhaps I should never worry about what others are doing, do what I can afford at the time, slow and steady, not a race

I did the calcs on this site prior to purchase - three (3x2 villas) and it stacks up nicely, however I thought I would also look at the apartment scenario which I have not researched and not familiar with, hence wanting input from those who build this stuff and know what they are doing

Interesting, from my calcs TODAY, I am way better off building 3x2 villas.... why ,.... cos I will make around $320K gross within a 12 month period, if I sell 2 and keep 1 I have cashflow of $16,000 gross.

If I go apartment (6) I make $400K however it takes 2 years to build, more risk, what if the market turns???, more $, Also I could have purchased another property during this period and made more money. *** far as cashflow goes , not that great it will be around $4000 gross pa.

Also, I have a problem with finance as we all do when going commercial - higher costs, sell OTP perhaps 50%, not something I want to do. With resi loan I pay 4.69% and build time is 12 months. I guess a matter of weighing it all up at the time. Of course apartments will make big $ in the right location, perhaps inner city.



MTR

 

[MTR]

I think numbers already work for a basic 2 lot survey strata, but if doing multis nets a bigger profit then why not

There's quite a lot of apartments in coolbellup area Marisa, maybe these could be used as a rough comparable..?

thanks Blair, I believe this is a lower base, I am currently looking at Palmyra and Melville for comparable sales I would say somewhere around this price range. I think Cooby has lots of potential.

 

[Aaron Sice]

Villas still make sense in suburbia.

Why change a winning formula?

 

[goponcho]

Interesting, from my calcs TODAY, I am way better off building 3x2 villas.... why ,.... cos I will make around $320K gross within a 12 month period, if I sell 2 and keep 1 I have cashflow of $16,000 gross.

MTR

Hey, just to clarify, so if you sell two, you fully own the last one which gives a cashflow of 16k pa?

Valued at 320k?

Thats brilliant!!

 

[WesternRat]

Interesting, from my calcs TODAY, I am way better off building 3x2 villas.... why ,.... cos I will make around $320K gross within a 12 month period, if I sell 2 and keep 1 I have cashflow of $16,000 gross.

If I go apartment (6) I make $400K however it takes 2 years to build, more risk, what if the market turns???, more $, Also I could have purchased another property during this period and made more money. *** far as cashflow goes , not that great it will be around $4000 gross pa.

MTR

sorry, skipped the part that you figured out feasibility already for a triplex. but for an extra $80k profit it takes another year to build plus all the risks you mention above...hardly sounds like it is worth the risk - holding costs alone would eat into that $80K over a full year?

everyday to work I drive past this 2F apartment construction on Orrong road Carlisle/Kewdale just before the Leach Hwy intersection. place looks half finished, interior render not finished, stickers on windows etc, also looks derelict and no one been working on there for months - broken windows, downed fences and junk everywhere. i think something happened to the builder or owner/finance earlier this year - imagine managing that risk if it fell into your lap!

villa option sounds "safe as houses" lol

 

[MTR]

Hi WR
I think what has happened in areas such as Rivervale, Kewdale, Belmont etc. there is an oversupply of apartments. I would hate to be stuck with these, oversupply means prices will most certainly drop.

However, there can also be an oversupply of villas as well make no mistake of that, for example Balga, Nollamara, I expect prices will go south now, perhaps they are falling already, have not being paying attention to this market. I would not want to be stuck with stock in this area, it may be some time before end values rise.