WA - West Leederville 6007, 3 unit development

Hi all

After absorbing so much information from this site, I thought I would contribute something back to the SS community and start yet another WA development thread. Hopefully it provides some info/inspiration to those considering doing something similar, plus I am under no illusion that I have much still to learn of the process ahead of me so am open to feedback/suggestions/constructive criticism.

We had been looking with limited success for a viable duplex/triplex/quad development site that fitted our criteria for location, site costs and construction costs for some time. Having a larger pool of competition from buyers for ?vanilla? deve sites, plus vendors seemingly incorporating any ?profit? already into their sale prices had me investigating what other opportunities were available. We decided to progress with a smaller sized site, building smaller scale apartment/multi dwelling units. After looking for a couple months, crunching a lot of numbers, add in a false start, plus some subtle encouragement, we secured a site in August this year.

Vacant block in West Leederville 6007, 354sqm, RoW access at rear
R60 zoning, plot ratio 0.7 = max 248sqm of apartments
1min walk to local shopping centre (Coles, pharmacy, bakery, booze, etc)
3 min walk to train line
15/20 min walk into CBD

Purchased in August 2014, 90 day settlement period
Residential finance, based on end values. 75% through P&N bank, 25% from PPOR equity & savings.

Proposed build
Three apartments
Two 2x2 apartments of approx 80sqm each, one 3x2 of approx 90sqm
Apartment 1 & 2 being double storey ?townhouse? style apartments, each with own courtyard
Tandem car bays (6 total) located off RoW
Apartment 3 single storey, located above the car bays, with large balcony at rear.

Post construction
Intend to retain all three long term
Potential to let as fully furnished, executive apartments. Will look at this closer in terms of returns/costs/demand when nearer to completion.

Initial napkin estimates
$700k site
$35k stamp duty and settlement costs
$700k construction costs (everything)
$110k holding costs over 2 years.
$50k contingency
$1.6m total

End values
$625k #1
$625k #2
$675k #3
$1.925m total

Potential gross return ? 20.3%

Progress to date
> Met with accountant to determine appropriate structure for what we intended. (Baggetta and Co)
> Met with finance broker to assess what was viable given our financial situation (Colin Rice, Empower Finance)
> Purchased the site in August.
> Finance obtained for the purchase of block, plus pre-approval given for the estimated construction costs.
> Block settled this week, 90 day settlement from purchase (MDH Legal)
> Recently finalised the initial floorplans/design - currently out for tender. We have engaged a building broker (HBA) to perform the tender process, due to me being unable to devote the necessary time to it with my current ?day job? working arrangements. I know building brokers are treated with a healthy dose of scepticism by some on this forum, I agree that some of the benefits they claim may be over exaggerated/unquantifiable. After a fair bit of investigation, HBA were in my opinion the most ?transparent? of the brokers I approached and what they offer in terms of tendering suited my needs as I currently don?t have the time to approach lots of builders. I?m halfway along the process with them, will update my findings here (good and bad) including posting up the plans once I have signed with whichever builder.
I love the site, as you know, and I can't wait to see how this project goes.

I think you're being conservative with your end values but it never hurts to be conservative :)
Wishing you all the very best with your development Skuttles. It takes guts to have a go and I hope it turns out nicely for you when its all done and dusted. Please keep us informed regularly as to how you progress.
Be interested in costings if you go masterwall:)


Obviously every set of plans/projects will be different, but I saw a roughly 5% saving in quotes of Masterwall over double brick across the upstairs of my 3 apartments (ie $30-$40k total).
Right, so really it will come down to savings vs end values? if traditional product is what buyers want and it perhaps will sell potentially for high price then this will also need to be considered.

All the best with your project:)
If I was selling then yes I would agree, but my intention is to hold long term.

For me the question was more - would potential tenants care if not double brick?

Through some brief conversations with valuers it seems to be a neglible difference whether upper floors are constructed from masterwall or double brick.
For me the question was more - would potential tenants care if not double brick?
You would need to ask some agents in the area that do rentals. Personally, I would have thought a great kitchen, decent bathroom, living area and decent sized bedrooms would be more important to tenants than the construction material of the upper floor. For mine, I am selecting some features as renting points and others are for low maintenance because I'm planning to hold mine long term too.
If I was selling then yes I would agree, but my intention is to hold long term.

For me the question was more - would potential tenants care if not double brick?

Through some brief conversations with valuers it seems to be a neglible difference whether upper floors are constructed from masterwall or double brick.

What do the valuers say about this structure for resale, am very curious???
Sorry Marisa but didn't ask specifically about resale, was only asking about any potential negative affect on how valuations are assessed by most banks.
I think you are right Jamie, perhaps I am over analysing it, I am being a typical Perthian, getting caught up with the double brick thing... lets move on:) From what has been posted it looks great and cutting cost I would certainly consider it with my future projects if I go apartments:)
Last edited:
I like Myfs/Marrissa's logic

Basically you would be happy to pay an extra 30k if it meant an extra 40k on the resale end value compared to spending say 5k and that holding its value at 5k, even though with the first you have to fork out a bit more.

It probably needs more added into the calculation ect (Like the cost of borrowing that extra 25k in the above example and the rates paid on that and what it means over a long term compared to the other option.

My parents just got a POD put on in Tapping. They did say on resale, how will anyone know if its brick or POD without asking? I guess most that know what they're doing would ask.

What are the sound, temperature benefits/differences of brick compared to the foam masterwall product?
Hi guys,

Just for kicks since I am bored :) and since I know how we "Perthians" are very much in love with double brick construction.

Having lived in frame built construction for 15+ years and now living in my brand new double brick house in Perth, I am sharing from experience and also as a professional builder.

Regarding insulation and thermal properties, frame construction with batt insulation far exceed homes built with double brick. My current home in Perth is double brick and I am regretting it every time it gets into the mid 30s (north facing). I am not used to such huge temperature changes in my house. I won't even go on about the car noise from the residential street.

Now the stats...
-Brick homes built more than 15 years ago avg 2.3 star rating
-today the requirements for new constructions is a 6 star rating
-frame with batt insulation constructions can easily achieve 8+ star rating

On top of all of this..the savings:
-frame construction is 2 - 3 times quicker
-meaning you pay less in bank loan, can start renting/selling your place quicker
-higher equity valuation (due to higher star rating) means more equity to invest in other projects.

just a quick thing about how big a deal it is to move from a 6 to 8 star rating. From 6 stars to 8 stars you would need to show that the home is on avg 50% more energy efficient to live in

oh I did a quick analysis and you would also save more than 70k in construction cost on top of all of this!

no wonder every country including Sydney prefer frame construction over brick.
Last edited: