Renting or Buying a roof space

[ha55sh]

Hi All,

I am new to this forum.

I think this is one of the best community forum with the Best Members in Australia.

I was wondering if someone on this forum has tried to rent/buy a roof space (private or commercial) and put a module home on top of it?

My intention is to rent (long term lease) or buy a roof space (buy the rights) in a well developed area and fit a module house on it. I would potentially live in it for a while and then either rent it out to someone or sell it off.

I would also be eligible for first home buyers grant.

Would you please be able to advise if someone on this forum has any experience with this or direct me to a property consultant/agency who would be able to help me out with that?

Thanks
Ha55sh

 

[esdarch]

It's interesting idea but the feasibility may not at bright side. Firstly, regulatory barrier: planning, fire, occupancy permit, etc; secondly the current structural design not for extra load of your module house; thirdly people have to subdivide the roof space before selling, then you may hire a large crane to put the house on top. I used to design & build a rooftop pavilion but it costs more than a normal house FYI

 

[ha55sh]

It's interesting idea but the feasibility may not at bright side. Firstly, regulatory barrier: planning, fire, occupancy permit, etc; secondly the current structural design not for extra load of your module house; thirdly people have to subdivide the roof space before selling, then you may hire a large crane to put the house on top. I used to design & build a rooftop pavilion but it costs more than a normal house FYI

Esdarch thanks for your response. I do understand there are some extra expenses such as council permissions, regulatory barrier etc but the only reason i started looking into it is because i thought there was a decent gap in between the price of a normal house and module house on top of roof space.

I am going to explore more into this, not that i dont trust your judgement as you do have experience with rooftop pavilion but this is quite popular in the UK and i would like to explore this here.

I am unsure of the following at this stage:

- A given council and its requirements/costs.
- Approximate cost of re-designing a given roof space etc
- Sub-dividing the roof. (I am guessing if it is being sold to me then this cost would be something that the owner would pay for?)
- Legal fees for a conveyancer to put a contract togather.
- I am also unsure what the lending criteria would be with the banks if i walk in with a fully prepared contract for either the lease of the roof space or buy one.

 

[wylie]

I cannot imagine too many people willing to sell their roof space to have something built on top .

If we sold you our roof space, would we have to remove our roof or would you do that as part of your "build"? Not something I'd partake in personally as an owner. I wonder how many owners you would need to approach before finding one willing to go down this path?

We once had neighbours wanting to buy our air space though to stop us building up for a better view. That is more common, but still fairly unheard of by most people.

 

[ha55sh]

I cannot imagine too many people willing to sell their roof space to have something built on top .

If we sold you our roof space, would we have to remove our roof or would you do that as part of your "build"? Not something I'd partake in personally as an owner. I wonder how many owners you would need to approach before finding one willing to go down this path?

We once had neighbours wanting to buy our air space though to stop us building up for a better view. That is more common, but still fairly unheard of by most people.

Hi Wylie, not everyone would put their hand up to rent their roof space however there would be some commercial sites interested in renting out their roof spaces as it would extra income for them.
There would also be a bunch of people who would be crunching for money due to various reasons (high interest rates, loss in business, extra income during retirement etc)
I would probabaly be looking out when the interest rates spiking back up next year when some people would start submerging their heads into water.

I agree its not a straightforward thing to do however its an unexplored territory here.

E.g: Someone who cannot afford to buy a beach front house/apprt in say Bondi/Coggee/Manly wouldnt mind purchasing an appartment which is moduled on the roof space and is a cheaper option (Only if it is cheaper, P.S i am on this forum to find out if it would be a cheaper option).

 

[esdarch]

Just some idea below:

- A given council and its requirements/costs.

A planning permit is first step as it affects the streetscape and may block view of adjacent buildings. The height & materials are heavily concerned by council. Cost is likely similar as normal TP application.

- Approximate cost of re-designing a given roof space etc

Just assume that the building structural is okay to put an alien on rooftop. The design will need to engage some specific consultants: fire, structural, engineers & wind analysis - probably. Powerpoint & plumbing may not available on rooftop and also required to redesign to connect to existing system. An extra "make up" staircase may be necessary. On the rooftop may have equipment plant and need acoustics solution for habitable building purpose. The more complicated the more expensive.

- Sub-dividing the roof. (I am guessing if it is being sold to me then this cost would be something that the owner would pay for?)

It is doable as my exp. with highrise complex. Not too sure with low rise residence.

- Legal fees for a conveyancer to put a contract togather.

Like normal.

- I am also unsure what the lending criteria would be with the banks if i walk in with a fully prepared contract for either the lease of the roof space or buy one.

Talk to broker. But I don't think the bank will like it unless you do as a business and show them how it works.

My suggestion is buying/ leasing an top floor of a building together with the roof space then your chance is much higher. Why a FHB want to have all this headache?

 

[S.T]

You might want to investigate people who rent advertising space like large signs on top of buildings? Mobile phone towers too? They would already have something in place to rent or own that space. they would probably also need the building permits for the structures too so this might be very similar in a lot of ways to what you want to do. Just some thoughts.

 

[underdev]

This is a clever idea! thinking for yourself and trying something new, well done!

However remember you are conducting business in Australia, the land of tall poppies. Councils wont appreciate having to do any extra work to consider this, builders will charge much more just cause it is more effort for them. I predict the red tape, legal and structural costs involved will make this unviable.

I hope you can make this work.

 

[turk]

A number of blocks of flats in the St Kilda/Elwood area have had an additional level added.

A joint venture with the owner might be an alternative option.

 

[ha55sh]

Hi All,

Thank you all for your feedback.

@ Esdarch - Thanks for the advise it definitely helps. In response to your question below:

Why a FHB want to have all this headache? -I think if i can get this going and make it work on a positive node, there might be bit of a reward at the end. Hence the hassle and headache.

Simtr, Underdev, turk - Thanks for you input.

If someone here is interested i will have more information come through on this project after the 13th of Jan 2014.

 

[wylie]

Having read some more, I agree that another level on either a block of units or commercial building would be easier to "sell".

I still cannot imagine anybody living in suburbia contemplating having someone build another level on their house. So many things that would/could go wrong (privacy, noise, parking etc just to name the really obvious ones).

It will be interesting to hear more though.

 

[ha55sh]

I do agree that the residential ones would bit a bit difficult to do but then again i think that you would end up paying lot less for a residential one as supposed to a commercial one.

Having mentioned the above i am keen to fit the module on a commercial property rather residential, but will see how i go.

Firstly i want to do a rough sketch on the estimated cost.

Sure i will keep the forum posted.

 

[marg4000]

How would you finance this? Obviously a traditional mortgage would be difficult. If it has to be a cash purchase, that would rule out many people.
Marg

 

[ha55sh]

if i would go ahead with this, i would be executing this under a company with a 20% deposit to the bank and the rest borrowed.

It would be in the following order:-

This would be the expense that i would be paying -

- Find the roof space and involve a solicitor to rent the air space.
- Get the contract ready involving the roof space owner.

This is the point where the bank would be the sponsor -

- Walk into the bank with a fully signed contract with the owner, estimated cost of the module house (around 120K) and other expenses to set it up etc.
- Have the 20% deposit ready.
- Get the loan funded.

 

[vaughan]

if i would go ahead with this, i would be executing this under a company with a 20% deposit to the bank and the rest borrowed.

It would be in the following order:-

This would be the expense that i would be paying -

- Find the roof space and involve a solicitor to rent the air space.
- Get the contract ready involving the roof space owner.

This is the point where the bank would be the sponsor -

- Walk into the bank with a fully signed contract with the owner, estimated cost of the module house (around 120K) and other expenses to set it up etc.
- Have the 20% deposit ready.
- Get the loan funded.

I think you seriously underestimate the time and money involved in getting plans and approvals with council sorted.

Finding a suitable property and getting the owner to agree is one thing, getting council to let it happen is another. And you expect a bank to buy 80% of the risk?