Subdividing and building two

[wll6568]

We have a land of 900 sqm in a suburb down in SA, and is thinking of sub dividing the land and build two single storeys. We bought the property with $400k and has recently been approved by council for subdividing.

Now it comes to the development part and finding the builder. But we have found that if we go through those popular builders, that would not make us any money at all.

Does anyone know if it's cheaper to find an architect to draw the plan and find a builder to build? Or if there's other workaround?

 

[RumpledElf]

Popular builders are the cheapest option. If that's not going to make you money, there's something seriously wrong. The word here is usually you can build a complete project home for less than $160k ... add on $200k for the land, subdivision costs, holding costs ... why'd you buy land for $400k if you can't sell half of it with a brand new house on for over $400k?

More info on your figures would help, there's a lot of SA developers floating around here.

 

[steveadl]

Yup, rings alarm bells for me too, but more figures would help.

If your figures are that tight that you can't make a profit with the popular builders, then trying to find a smaller one to shave a few $10k's off the price may see you end up in a bad situation, or at best a small profit which probably isn't worth the added risk of developing.

 

[bcoombs]

I'm based in Adelaide and do numbers for my clients all the time and go out and choose a builder based on the expected end value. End value depends on the suburb and whats selling currently and for how much. We have high end builders and ones that are 20 week build times ( lower spec ).

 

[clubbie]

Suburb or next to it would be nice. Holding costs?

IF you think it is going to be marginal the bad news is costs always blow out even if it is by small amount (x2). Hold on to it if you can afford to or sell if you can not. No harm done.

Alternatively just do the development and learn from the whole process. You will make a few mistakes and maybe kick some goals. You will get really good tradie contacts as well. From your OP the reason why people go with builders is minor/major issues for a new home are warranted by the builder for 10 years. If you owner build you have to carry that. Then you have the issue of can you build the houses for less?

 

[Gools]

Feel free to post some rough figures. There are plenty of experienced developers on here who will point you in the right direction. Building will cost you > $1000 sqm* so you would want to be selling the finished product for at least $450k for it to stack up.

Gools

*- There are cheaper builds available, like Rumpled Elf is doing, but I don't think you would want to build something on land that will end up costing at least $220k a pop.

 

[RumpledElf]

I'm building a weatherboard transportable for around $104k+connections, I doubt they're even allowed in metro areas. Land here is ~$50k not $400k but they still manage to sell even weatherboard transportables here for $300k (and brick ones for anything up to $700k), go figure.

Damn prices have gone up. I bought my first house in Adelaide for $40k back in '99 - tiny little 1-2 bedroom single fronter cottage on 500sqm.

 

[RocketMan]

if you can't make money using an off-the-shelf builder then you have no hope. Just hold onto the land and forget subdivision.