Two Dwellings on one block Valuations?

[TMNT]

Hypothetical question,

assuming houses on 600sqm block 3bdrs average price = $250k

I buy a 1200sqm block with an existing house, keeping it on one title, if I put a 2nd dwelling on it,
would the valuation from finance purposes be $500k minus the inconvenience from one title?

if so how much of a discount would it be

I guess if its an area prime for development or rezoning, it would actually be a gain in values for having 2 side by side blocks of 1200sqm

 

[Terry_w]

No it wouldn't.

It would be the market value of a block with 2 houses. I have had clients valuations for properties with granny flats come in no higher than it would have without the granny flat.

 

[Mick C]

from experience 2 valuation method depending on the area, exact property type and zoning.

1. Valued as 2 houses on 1 title

2. Valued as a 5-6 bedroom house

Cheers

 

[Redom]

Valuers often take the view that sort of property adds yield to the property, but not as much in terms of capital gain (hence the significant discounting).

 

[TMNT]

Valuers often take the view that sort of property adds yield to the property, but not as much in terms of capital gain (hence the significant discounting).

thats interesting,

but all thats required is for someone to pay the subdivision costs, and then you'd have 2x$250k houses,

but there are heaps of properties/areas where agents are advertising and people are paying a premium for side by side dwellings

seems rather contradictory to me

 

[Redom]

Agree, it doesn't make much sense to me...(but that wouldn't be the only question mark I have about how they make their assessment)...wont happen all the time, but that's the explanation i've got before.

For newer stock, some agents do have issues getting rid of their stock because of financing concerns. I was always told that i'd have to go to 80% lends. Not because theirs no scope to go to 90, more because its important to have a buffer in case of val shortfalls.

From my research, i've noticed the difference in price between a duplex and a dual income (separate titles, but very similar), are well above the difference in subdivision + inconvenience costs.

thats interesting,

but all thats required is for someone to pay the subdivision costs, and then you'd have 2x$250k houses,

but there are heaps of properties/areas where agents are advertising and people are paying a premium for side by side dwellings

seems rather contradictory to me

 

[Rolf Latham]

thats interesting,

but all thats required is for someone to pay the subdivision costs, and then you'd have 2x$250k houses,

Only if the property can actually be subdivided.

Most of these will be licenced dual occs, rather than true 2 titles

ta
rolf

 

[HD_ACE]

My last valuation was two on one title. It was valued as two seperate properties- minus subdivision fees, holding costs etc which equalled 15%.

Depends on the lender and valuer

 

[TMNT]

Hmm interesting

I'm looking at a property which can easily be subdivided not a problem but there is plenty of room to put another dwelling on and I'm thinking of moving a house on there

So was wondering what the best ways finance and valuation is

And to see if this is an awesome way to build equity

 

[Marty McDonald]

If it can be subdivided without much fuss from council then I think this will affect the valuation if not always directly. I reckon it would end up being valed at about $450,000-$460,000 assuming subdivision is possible.

If it's not able to be easily subdivided then I would expect a much lower figure.

That all said it depends on the Valuer too.

 

[VaSSagO]

From what I have seen is you also get a big variation between valuers.

Last one was two on one title purchased at $525k, if separate would be worth $300k each. Valuer A & B valued it at $525k, valuer C valued it at $485k (though said in report if was on separate titles would be worth $580k).

The dwellings were pretty unique for the area so not sure if this influenced the valuation.

Will put the wheels in motion to get them separately titled soon

 

[Aaron_C]

Standard discount is 15% for 2 on one title, 20% for 3, and 25% for 4. Beyond that is a commercial lend so the in-one-line valuation isn't as important.

 

[PropertyInvest1]

The latter posts above are correct.

Assuming the second dwelling has been built in accordance with a planning permit then it's Dwelling A + Dwelling B less subdivision fees and contingency (10% for something basic).

If it's a granny flat then that's a different story.

 

[beachgurl]

I just had a Val done on a DA approved splitter block with one house across the block. Was valued as a single house on a single block.

 

[PropertyInvest1]

I just had a Val done on a DA approved splitter block with one house across the block. Was valued as a single house on a single block.

The property should always be valued at the 'Highest and Best Use' and all planning permits taken into account.

Assuming it was an 'as is' valuation and not 'as if complete' valuation then it is up to the valuer to determine whether the permit would add value to the property.

 

[grand dad]

I tend to be wary of property spruikers who own zero or hardly IPs. I am also wary of those who are talking their book and selling their overpriced junk to gullible investors.