Sub divide - build and retain or demolish and build

[Paul j F]

We have had a feasibility study done on our property. Excellent sub dividable potential with good profit potential.

Old house is well forward of block, with room for rear dwelling no worries. We were simply going to build at the back but now looking at demolishing because there's at least $170-220k to spend on Reno at front.

Location is Brighton East in Vic. I would be looking at around $40k to rent elsewhere for 12 months.

Do you think I'd be adding enough value on 2 new rather than a Reno and build.

 

[wylie]

How much would a new build cost as opposed to the Reno at $220K? Could you ask local agents which is better?

And lastly, whichever you decide, why not live in the current house while you build the new one at the back and save $40K in rent? Then move into the back one while you build or renovate the front house.

 

[Paul j F]

How much would a new build cost as opposed to the Reno at $220K? Could you ask local agents which is better?

And lastly, whichever you decide, why not live in the current house while you build the new one at the back and save $40K in rent? Then move into the back one while you build or renovate the front house.

We are meeting with a builder this week to discuss figures. My initial thought is that the reno costs on the front house would be very close to the cost of the second house. ie. building 2 is cheaper p/sqm than 1 so. If the rear dwelling was going to cost $320k then I could get two done for $600k

Did consider the build at back and then knock down the front and build again but holding costs, disruption to family and time etc. Decided its either build and reno or knock down and build 2 new.

 

[Belu]

seems interesting that an existing house would require $220k reno whereas a new build, of the same size, would cost $300k to build? House must be near fall down stage as it is.

So we need some more info:

- what would be the market value of the front house renovated
- what would be the market value of a $300k build on the front block?

 

[Paul j F]

Falling down, no. A lot of work yes. $170-220k was based on taking a circa 1950 semi Art Deco house that needs, 2x bathrooms, new ceilings throughout, windows, kitchen, heating/cooling, rewire, some walls removed, laundry, gutters, fascias and more. The added on room at the back would have to be reduced to fit another dwelling. It would have to be rendered and the facade altered to match the rear. A lot of work and $ to bring it up to a good standard.

$300k per dwelling was very arbitrary figure based on $1700/Sqm and 180sqm houses. Is that realistic, I am unsure until I speak to the builder. I suppose I'm trying to establish if the economies of scale of building two makes it worth demolishing considering how much work and $ is involved in the renovation.