This is my self created full time job. I don't receive any income other than rent from the IP's we have held and the houses we have sold. I eased into this from being a landscaper - slaving away for 30k a yr! Actually the work was quite interesting but heavy labouring most of the time.
Now the work is less labouring, more interesting, more personally rewarding and has set us up financially for early retirement if we should decide to stop in another year or two.
Carrying out development projects while holding down a full time job, I'm sure, is a whole different ball game with a completely different strategy as far as finances and time management go.
It would have to be carried out along the same lines as my first duplex project where I contracted a project home builder to build and manage the entire job from DA stage to completion (apart from landscaping and driveways). It was an ideal site for a first timer. The block was flat, large and satisfied all of council requirements. With a duplex, you make the money out of splitting the block and creating a second title. For this reason I would expect that you would profit more where land values are higher. The difficulty is that you require a greater capital outlay to fund the project. My land purchases to date have all been between 210k - 265k. Council contributions in my area amount to around 30k for a dual occ approval. Our first block was purchased for 210k.
Rough figures were:
Land 210k
Council 30k
Contract for 2 houses 293k
Interest 10k
Strata Subdivision 7k
Miscellaneous 10k
Total 560k
Sale of house 1 - 405k
Sale of house 2 - 385k (private)
Agent fees - 10k
Total sales minus agent fees - 780k
After tax taken out we made around 190k and the project was completed in around 12 mths. We sold the first house immediately. We rented out the second house for over a year prior to selling it to my wife's sister as an IP. Therefore tax for H2 was calculated using the 50% capital gains discount (income split between my wife and I)
We try to limit our new house sales to 1 per financial year so as to avoid paying higher amounts of gst and income tax. This works very well for us and legally limits our tax burden.
As a comparison of strategy, my most recently completed duplex project was a purchase of an existing house.
Figures were roughly as follows.
Existing house on 940sqm - 330k
SD and legals - 12k
Renovations - 20k
Construction of new house + strata subdivision, landscaping, etc - 186k
Agent fee - 12k
gst on sale - 10k
Interest - 10k
Total Cost - 580k
Sale of new home - 410k
Value of existing home - 400k
Financial Gain - 230k (timeframe 14 mths)
We actually moved into the renovated existing house prior to the construction of the new house. The existing home will be sold as PPR (tax free) when we complete our current duplex project in a few months. We will move into one of these new duplex units and it will become our new PPR. Things will roll on from there to the next project which will be our first 3 unit development. DA for this project will be lodged in the coming weeks once settlement on the land takes place.
As they say, "it's all happening"