We have a house in Morphett Vale worth 245k with a rent value near 200pw (clear). We want to work out if it is worth knocking down, sub-dividing and building two on the block or waiting and renting or selling and buying in a better location. This is our first attempt at subdivision and any advice would be appreciated.
 
Where would someone go for a feasibility study and how much would it cost?

If done before purchase what is stopping that person from gazumping you via an external party?
 
We want to work out if it is worth knocking down, sub-dividing and building two on the block

Your first stop should be contact the Onka council or a surveyor,they will advise if your council zoning will allow this,this will cost you nothing.You may be surprised and be able to get more than 2 on the block.
There are BA,s(buyers advocates),who post on here,Logica,will give you your answers,a full study would cost,but too make money,you have to spend money.
 
We have a house in Morphett Vale worth 245k with a rent value near 200pw (clear). We want to work out if it is worth knocking down, sub-dividing and building two on the block or waiting and renting or selling and buying in a better location. This is our first attempt at subdivision and any advice would be appreciated.

You need to do some homework and find out:

- how much would it cost to demolish
- how much would it cost to subdivide (council/govt costs)
- how much to run services (gas/elect/phone etc) to the 2 blocks
- how much to build the 2 houses
- how much would they rent for (ask a local PM)
- how much would they sell for (ask a local REA but they can only estimate on today's values)

Then compare that to doing nothing (which is think is your second option)

Then compare that to perhaps improving the property to increase rent (not an option listed)

Then compare that to selling and it's associated costs and buying something else and it's costs
 
....There are BA,s(buyers advocates),who post on here,Logica,will give you your answers,a full study would cost,but too make money,you have to spend money.

Thank you jim for the mention. Cost of a feasibility study depends on complexity. Most developers, like westmister, have their own quick back-of-the-envelope methods. If it looks like feasible then the developer would conduct a full study with all the costs, risks, time lines etc included. Make sure your assumptions are robust and realistic, i.e. check info via at least two sources.

Good feasibility study will help you to get finance approved too :)

Cheers, Paul
 
Thank you jim for the mention. Cost of a feasibility study depends on complexity. Most developers, like westmister, have their own quick back-of-the-envelope methods. If it looks like feasible then the developer would conduct a full study with all the costs, risks, time lines etc included. Make sure your assumptions are robust and realistic, i.e. check info via at least two sources.

Good feasibility study will help you to get finance approved too :)

Cheers, Paul

Where can one get the feasibility study done in Sydney? Any recommendations?
 
We have a house in Morphett Vale worth 245k with a rent value near 200pw (clear). We want to work out if it is worth knocking down, sub-dividing and building two on the block or waiting and renting or selling and buying in a better location. This is our first attempt at subdivision and any advice would be appreciated.

I don't know the area, but judging by the value of the house, it won't be worthwhile to knock down and rebuild. You would be paying $122.5k per block to build on and are unlikely to get a high enough return on the investment. The only way it is likely to make sense is if you can keep the existing house where it is, or relocate it on the block, then build another house.

What does a block of land cost in that area?
 
As stated do a study done, make sure you include the holding costs.

Maybe now is not the time to develop the block? Have a look in the area to try and find similar developments and see how they have proformed, have they sold? are they tenanted etc.


Not sure about the current property you own, but possibly an option might be to borrow ~$5-10k (@ 6% its $300-600 p.a) ontop of your current mortgage and try and add some value and increase your rent ~$40-80p/w ($2080-4160 p.a) both the value add and increased cash flow will help you when it makes sense to develop the property if it doesn't now.
 
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