Subdividing, Building or sell outright- NE suburbs, South Australia

[ExplorerGlenn]

Experts,

Recently got into the property arena. Found lot of value on the forum. had a query popping up in mind. Thought to ask from wise on the forum.

Situation: Got a sub dividable house in Sep 2014 in one of the NE suburbs of Adelaide ( Modbury). The total cost of house ( including stamp duty and interest paid till date) : about 310 K. Based on location and dimensions I believe it would have been BMV by about 15-20K. Property is about 650 sqm with 22 mtr frontage.

Options: With market in the area upbeat, I am now thinking of extracting the benefit. 3 options:

1. Sell outright ( Not sure of Selling price and hence suggestions needed at end of message)
2. Subdivide in 2 and sell each piece of land at about 200K. ( Subdivision cost: about 40-50K. Profit of about 30-40K)
3. Subdivide build and sell each one at about 370K ( Build cost+sell cost of less than 200 K per dwelling. Profit of about 50-60K)

Suggestions needed:

1. Are the figures somewhat realistic?

2. One of my friend ( not a property expert) values the property at about 350-360K presently based on sales in the area. However RP data etc value it at the price I bought it. Is it worth trying to list the property in market to assess the "actual Value"

3. With efforts vs returns comparison, What's the best deal out of 3 listed options?

Feel free to ask questions if I missed out on anything. Criticism of my understanding is welcome!!!

 

[ExplorerGlenn]

Any expert views on the topic?

 

[freerange]

Im no expert but..... Its quite an open ended question with lots of difficulties that could pop up along the way.

Have you taken into account holding costs while subdividing/ building? If you have never done a subdivision before bank on about around 6 months and building could be another year on top of that depending on builder etc.

It all depends on how the numbers stack up, alot of time a 1 to 2 subdivide and build isnt worth the extra effort, time and hassle over a subdivide and sell for only meager gains. I believe building to sell puts you in a whole different basket come tax time, best to ask an accountant in regards to thise things too

 

[freerange]

Also my last 1 to 2 subdiv in adelaide was just shy of $25k.

 

[D.T.]

Not a subdivision expert, but my one was 20-25k.

Get a quote from a surveyor to be sure. I used sawley lock in prospect. Tell them i sent you if you want.

They'll advise what water stuff will be needed, what council crap will be payable (some councils have different contributions for different reasons).

Building cost - id probably allow $1500 / sqm to be completely on the safe side. Modbury is reactive / hilly so footings will cost more, decent spec is expected and thats essentially "turn key" (adelaide hasnt learnt that word yet).

 

[ExplorerGlenn]

Have you taken into account holding costs while subdividing/ building?

Interest for 3 months holding has been considered. Is it legitimate?

 

[ExplorerGlenn]

Also my last 1 to 2 subdiv in adelaide was just shy of $25k.

I believe you meant in total, over 2 subdivided blocks and not per block?

 

[ExplorerGlenn]

Not a subdivision expert, but my one was 20-25k.

Get a quote from a surveyor to be sure. I used sawley lock in prospect. Tell them i sent you if you want.

They'll advise what water stuff will be needed, what council crap will be payable (some councils have different contributions for different reasons).

Building cost - id probably allow $1500 / sqm to be completely on the safe side. Modbury is reactive / hilly so footings will cost more, decent spec is expected and thats essentially "turn key" (adelaide hasnt learnt that word yet).

Have been to the council to understand the costing/process. Have to go through the process but on rough on paper plans are Ok with the council. A question raised with regard to carport entry getting obstructed by a small bush/tree. Surveyor says its easily avoidable.

$1500/sqm build cost for single story?

 

[D.T.]

Yea its on the high side, but watch the footing costs there. Some builders dont do some stuff, such as flooring , landscaping etc that ya do seperately through a but included in my figure.

Mines less than that, prob not the spec you'd want for modbury.

Estimate high, wont be disappointed with end profit then.

 

[ExplorerGlenn]

Thanks Dave,

One question: 20-25k per dwelling or in total.

 

[D.T.]

Total if its going to be 1 block into 2