Rennovate or sub-divide

All,

As the name suggests I am new to this!

I purchased a house in Glenelg North (SA) in 2007 for 389K. It is on 680sqm, is in great condition with scope to extend (currently 2BR and 1 bath). The house is currently tennanted while I am OS for a year or two and I am looking to develop. My options are extend and rennovate or sub-divide.

Option one - extend and rennovate

The house is set-up so that I could extand off the back adding a open plan living/dining and the master bedroom with ensuite with perhaps a fourth bedroom as well. I am unsure as to costs but there would be no need for any landscaping, demolition, etc.

Option two - sub-divide

This is my preferred option - I am bullish by nature and would like to be fairly aggressive with how I develop this property. Unfortunately the council requires all sub-divisions to be at least 350sqm (City of West Torrens). This would require me to either wait for requirements to be relaxed or purchase adjoining land I am 20sqm short! :mad: Assuming this is not a problem my sums are:

10K demolition
20K subdivision
380K both houses
30K holding costs

440K total

If I add 389 to 440 I get to a total development cost of 829K.

I am hoping to get some advice on the best way to develop this property and gain the maximum increase in value for me. Especially around the land size issue (any inside knowledge of City of West Torrens future intentions would be amazing! :) ) and associated stamp duty, etc.

I am very keen to learn all I can and am very excited to have found this forum.

Thanks in advance guys!
 
Real Estate Development - Subdivision

If you are 20sqm short of a permissible subdivision area according to Councils development guidelines then you could have a some challenges here.

To add land to your property you would need to lodge a DA to subdivide your property with the neighbours’ property. If approved this would enable you to shift the boundary to increase the size of your property. You would in fact be lodging a 3 lot subdivision (2 existing lots + 1 new lot).

The issue with this is that most neighbours are usually not interested in selling bits of their property to neighbours.
Secondly if you could buy 20sqm from your ne
ighbour you may find that it will be expensive on a square metre basis. This is not an issue providing your development is feasible.

Finally you would need to ensure that what you are considering is permissible by Council / your Local Government.

While optimism is an essential part of real estate development doing your homework including financial feasibility, permissible use, acceptable to neighbours & satisfying market demand is key to your success.

Philip
 
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