Unit Development Fee Proposal

[Buildn]

I have received a fee proposal for designing and submitting plans for a four unit development in the newcastle city council area. It is my first development and was hoping that someone could advise me on whether this schedule of fees is reasonable or if there are any parts that i could easily do myself for cheaper with no hidden costs or difficulties. It is a 919sqm block sloping 4metres over 60m towards the road with a floor space ratio of 75% and 25% landscaped area not including open space and driveways. I have approached two other firms and they have not replied in two weeks so i am getting very eager to get under way but wanted to see if i could get any opinions from the forum before proceeding.

Yeild Plan - Ensure compliance with council including site visit and council enquiries

$825​

Concept Design - Based on yeild plan including plans and 3D elevations

$1650​

DA architectural plans -

$3300​

Statement of Environmental Effects -

$440​

Basix Certificate x 4 -

$1100​

Liason with Consultants (stormwater and landscape) -

$330​

Preparation of application for Council Lodgement (printing, plotting, lodgement) -

$495​

Stormwater Design -

$1980​

Landscape Design -

$1650​

Total -

$11770​

Thankyou for any recommendations.

 

[anson_he]

Hi,

The numbers look reasonable to me as I have just submitted a DA to New castle city council for a 7 units development in Birmingham Gardens.

There will be some other costs:
1. $380 for hunter water
2. Council fee
3. Quantity survey for construction cost

Where is your development site?

Cheers,

Anson

 

[rhyslivs]

Are these fees excluding or including GST?

Forgive me, but which consultant is this a fee proposal from? An architect?

 

[Buildn]

Thanks for your responses and tips on extra costs to consider. The site is in Elermore Vale under Neighbourhood Centre Density Zoning. According to the latest Your Investment Property magazine the area has experienced 45.86% growth for units in the last 12 months but that figure had declined since the previous month. I am pretty pleased but am anxious to get this development done asap before the market declines substantialy so I had gone ahead and accepted the fee proposal and am happy to see the figures seem reasonable.

Birmingham Gardens is a very good area for uni accomodation investment, i am currently renovating a two bedroom house in waratah west turning it into a three bedroom specifically to target this market. I have heard the new council regulations have caused a few DA difficulties for developers in newcastle since they were introduced earlier this year and i would be very interested to hear what, if any, problems you encounter throughout the process Anson.

The fee proposal is from an architect and does include GST.

Thanks again
Buildn

 

[rhyslivs]

I thought if stormwater design was necessary it would generally be undertaken by a hydraulic engineer? Maybe I am wrong on that but.

Also, if you are in a hurry make sure your architect is on the same page, you can really get held up by slow architects.

 

[Mamaof3]

I would say all of these things you can deal directly with the relevant people Yourself...however, $11K seems quite reasonable and if your margins allow for it, wouldn't hurt to let them do all this for you if its your first development.

Stormwater design seems a little excessive to me...i think this would normally be done by the Engineers that prepare your Engineers Report so why there's a seperate fee involved i'm not sure.

Take out the Landscape Design fee and the Liason with Landscape consultant..thats just a waste of money.....landscaping is not rocket science and you don't want to do much more than a few plants, mulch and minimal lawn. Whatever landscaping you do, keep it to a real budget (but nice looking) and simple. The people who buy your homes may not like what you do and end up ripping everything out and re-doing it themselves anyway.

With regards to the plans - you may want to shop around and engage in a Draftsman rather than an 'Architect' as they are often alot cheaper.

I hope you realise there's quite a few things that aren't on the list that you would need to allow for?? eg. Engineers report ($2-$5K depending on scale of development) etc.

I would query whether that lodgement to council fee includes the planning stage as well as building approvals...

Not sure what the basix certificate x 4 is???

Hope this helps.

 

[Buildn]

I have consulted with my architect/engineer and raised a number of the issues mentioned above as some of them did concern me. The extra costs to be considered were:
For DA and construction
-Council Fees
-Quantity surveyor
-Hunter water fee
For Construction only
-Engineers reports including hydraulics(plumbing) and structural engineers

In regards to the other issues he said-

-The stormwater engineer is required to identify how and where all stormwater will be collected by water tanks (minimum size tank required by council) as well as how excess stormwater will be effectively stored at and/or drained from the property. The plan must satisfy council in order to obtain DA.

-The landscape plan is something i could do myself but council requires my plan follow a number of particular guidelines i am unfamiliar with and would have to be signed off by an industry professional with relevant qualifications.
I think i am going to leave this to the landscape engineer as i was assured that the price quoted was a maximum outlay and my particular site would incur a relatively lower cost.

-The basix certificate is only in NSW and relates to ensuring a development complies to certain council requirements including items such as pools, spas, water recycling, rainwater tanks, thermal comfort, roof material, appliance ratings etc

All up Development Approval and Construction Certificate should cost just under $25k, $7500 worth of these extra costs on top of the original $11k is made up of council fees which i was originally aware of, so total is a little higher than expected but not outrageous.

 

[anson_he]

Hey, your new numbers does look reasonable to me. Forgot to point out last time, your storm water and landscape design seems to be a bit dear. It normally costs probably $500 for a landscape design and $250/unit for storm water. If you can bargain with them to get a cheaper price, that should save you some money. Have you included section 94? That would cost you around $6000.

With a 4 units development,
council fee: $4000
Quantity surveyor: $550
Hunter water fee: $380
Section 94: $6000
Construction Certificate: $5000 ~ $7000

I hope you have included all of them in your feasibility study. Are you going to pre-sale some of them or just keep all of them for rental? What's your return look like, above 25%? What's your estimate of the construction cost?

There are lots of development in Elermore Vale area but the price for units are still quite stable, DID NOT drop at all. How much do you expect they can be sold for? Considering your site is so close to shopping center, I think you probably can get $330K for a 2 beder and $370K for a 3 beder.

As you know, Newcastle city council has changed their DCP at the beginning of this year. They abolished density based zoning and introduced floor space ratio, which actually allows more units to be built. The only catch is they require 25% of site to be landscape area and the area with a width narrower than 3m is not accounted. But keep in mind, this is still negotiable if your design looks attractive to them. So the most important thing to do is to go to council's website to have a look those DCP and ask those pepople you got your quote from what they can get the DA approved with the MAXIMUM profit. A DA without a fight with the council is not a good one.

Good luck, all the best. I am also living in Newcastle locally, maybe we can catch up with a cup of coffee one day.

 

[Buildn]

I hope you have included all of them in your feasibility study. Are you going to pre-sale some of them or just keep all of them for rental? What's your return look like, above 25%? What's your estimate of the construction cost?

1. Yes all these have now been included in my feasability study
2. I am going to try and pre sale all of them if possible
3. Return is unfortunately not as good as 25%, it is actually only 19% which is not ideal but the actual dollar figure still looks really good to me for my first development
4. Estimate for construction is 560sqm at $1200sqm which works out at $675k

How much do you expect they can be sold for? Considering your site is so close to shopping center, I think you probably can get $330K for a 2 beder and $370K for a 3 beder.

Your estimates of $330k and $370k for sale price are spot on. I have done considerable research but i have just recieved my plans ready for lodgement today and I am going to take them to some local real estate agents to get a more exact estimate.

The only catch is they require 25% of site to be landscape area and the area with a width narrower than 3m is not accounted

This is quite a catch and made the design process a real juggling act but im sure I have squeezed the maximum profit out of this site and now I just have to cross my fingers and hope that all goes smoothly with council.

How is your application going Anson? I would be very interested to hear any feedback you get from council. Is your return 25%, if it is that is outstanding, have you done many developments before? I would be interested in catching up someday and perhaps learning a few tips and tricks!!