Which Splitter Block is best?


For several years I've owned two "Splitter Blocks", hoping one day I'd be in a position to develop them. It now looks like I'll have to sell a property urgently, due to some unforeseen expenses. I accept this, but am unsure which is the best one to keep:

The first is an 809m2 block in Murarrie (Qld), with an old house plus separate granny flat. It's on two lot numbers already (each 405m2) and I currently receive $400 per week rent from one family. A local agent appraised this property at $460K "as is", although if I demolish it they said the individual 405m2 blocks could sell for $275K each. On the other hand, there is a large new development happening just a block or two away at nearby Cannon Hill (is this likely to increase or decrease values in the area?).

The second is an old house in Clifton (Qld) on 1,417m2 (again on 2 x lot numbers) which is rented at $200 per week. There is a "Coal Seam Gas" plant (or something like that) proposed about 15 minutes drive away. If this is approved, it will mean a lot of new jobs and people needing somewhere to live. My fear is that if I sell now, before it's approved, I might regret it. There are various options with this property:
  • Sell the House "as is" (the agent there suggests $170K sale price)
  • Demolish the house and sell it as 2 x vacant blocks
  • Demolish the house and relocate 2 x homes on to the blocks
  • Demolish the house and build 2 x new homes
  • Demolish the house and apply for townhouses/units?

I'm not in a position myself to spend money demolishing (or building) anything. What would you do? Would you sell Murarrie and keep Clifton, or sell Clifton and keep Murarrie? Please share your thinking process, to help me make the best choice.

Thank you in advance for your suggestions and ideas.

Kind Regards,

Jason (aka Synapse).
When you say these are on two lot numbers are they each on two separate titles or one title comprising two lot numbers?

Thanks for replying so quickly! I receive just one rates notice for each property, so I imagine they are on one title (with two lot numbers).

I enquired about a year ago with a town planner about my Murarrie property and was told it was a simple process to separate it into two titles (just registering something at the Titles Office for a couple of hundred dollars, from what I recall).

The biggest cost would be demolition of the existing house and paying for sewerage and water connections to the 2nd block (although I believe I can leave these connections for the new buyer to organise when they are building).

On Monday I'll give the town planner a call and confirm the costs. One good thing is that there are definitely no council contributions (i.e. infrastructure charges) to pay, because the two lots already exist.

I'll reply again after I speak to the town planner. Any suggestions/questions in the meantime are most welcome.

Kind Regards,

Quick Update...


I've spoken to a private town planner this morning and he confirmed that Water & Sewer services are easily accessible to my Murarrie property. The Sewer runs through both blocks near the rear, so all that is needed is a connection point on the 2nd block ($2,500 should cover it).

I'd also need to pay a "quote fee" regarding connecting the Water, and if this is less than $4,500, apparently Qld Urban Utilities will cover the cost of installing it. :) This is because it's already 2 x existing lots (as opposed to subdividing and creating a new lot).

That was a pleasant surprise. And then what I found out next was AMAZING! :eek:

My property is a part of the "River Gateway Neighbourhood Plan" and is about to have a zoning change from LR (low residential) to LMR (low-medium residential)! This means that instead of it being just 2 x house blocks, it will be suitable for at least 4 x townhouses or units!! :D

This would be a great selling feature to sell Murarrie, but should I sell it now? Or wait until the zoning change is official? Or try to hold it and develop it myself someday? My problem is that this property is negatively geared and I need to release some equity ASAP.

So this brings me back to my original question... Should I sell Murarrie and keep Clifton, or sell Clifton and keep Murarrie? Either way, I need to do something in a hurry. :confused:

Any thoughts?

Kind Regards,


Sounds like you have lots of options.

However with most of those time will be a factor.

Sounds like at present time being an issue and assuming you have no other options for funds you may want to put both on the market and maybe the market might make the decision for you.

They both sound like they have good chances for growth coming but how long that will take is a bit like how long is a piece of string and when it does I am sure you will regret selling.

Try to focus on how that sale either helped your sleep at night factor or secured your growth of current or future investments.

Clifton may have merged with Toowoomba Regional Council and T.R.C. have taken up a metro pricing structure in some cases charges have increased by 300 % for some of the shires around Toowoomba. You may want to check if you are required to pay a Parks contribution for your Cliftion lot if it is not already subdivided which may not have been previously required up until a year or two ago.

In case you did not know Ambre Energy are the ones putting in the proposal near clifton.


Good luck with your decision. Investment is risk and I will let you make that call.


Although there is undoubted real estate capital growth potential in relation to the coal seam gas explosion I would tread very carefully.

The government is after a bit of money and have made a whole lot of reports suggesting environmental impacts are minimial.
Do a bit of research - basically involves pouring chemicals into the ground which sucks a large amount of water back up through the ground. This can have two effects, poisoning underground water supply and dehydrating the land.

Problem with CSG is a lot of it is found in fertile farmland. So they are going in to peoples land with government permits and drilling. While the gov might see this as a good way to make money in the short term they dont really have any way of knowing what the long term effects on agriculture will be.

Toowomba is also above the artesian basin which is our biggest underground water source. Covers about a quarter of the country. This is used mainly for agriculture water purposes but is a good back up for the general population in drought. If this were to become seriously poisoned then then it would be a disaster for the agricultural industry.

If such fears come to fruition in the years to come the Coal Seam Gas 'gold rush' could be stopped pretty quickly by the government.

Also be aware that CSG is very labour unintensive and once its all set up in the area near you there will be cut backs on labour.

If your going to hold the Clifton property do your research. If your not going to do research on CSG then I would sell it.

Not advice just something to think about
If you sell two blocks and keep both the houses for rental income wont it be better for your financial situation? I definitely think so
Can you move one of the houses onto one of the blocks and sell of the vacant lot. Rent won't change much and you get to release some cash.
Great ideas, thank you!

Hi All,

Thanks everyone for sharing your thoughts... I am now much clearer on what to do. :)

Firstly, I have decided to put both properties on the market for sale (thanks Fourex!). I like this option because it will help me get the quickest outcome, and saves me making a choice until I see an offer presented to me. Perfect!!

Shifting my focus from "what I might regret" to selling is a positive step that helps my situation is a great way of looking at it (thanks again Fourex).

Thanks Strongy1986 for the information regarding CSG (I didn't know that much about it). What I do know is that we need to make respecting our enviroment a priority, so I sincerely hope they know what they are doing. I appreciate your comment that if I'm not prepared to do the research, it might be better just to sell.

Globaljat & RPI: I'd love to be able to sell one of the blocks (and keep the house on the other), but unfortunately each house is spread across both blocks (and too wide to relocate). Otherwise it's a great suggestion, thank you.

NedKelly: I want to sell ASAP, with at least one sale to complete by mid-May ideally. I NEED to sell and have clear funds available by 12 June 2012 at the latest.

The problem came about due to a sale of a different property (vacant land) becoming unconditional, then the buyer (a company) went into liquidation before completing the purchase. I'm now left with a real estate sales commission to pay, even though the sale didn't complete (this is ridiculous, but apparently they're legally entitled to it because of something I signed). :(

My ideal outcome would be to sell this vacant land, but no-one seems to want it anymore (I can't even get a "crazy" offer on it). :confused:

Kind Regards,

Thanks Redwing, this is one of those times I wish I had a Time Machine so I could go back and do a few things differently... Anyway, all I can do is the best I can with the hand I've been dealt.

One thing I know for sure is that you never stop learning! I'll let you know how things go... :)
I'm now left with a real estate sales commission to pay, even though the sale didn't complete (this is ridiculous, but apparently they're legally entitled to it because of something I signed). :(

I hope you have actually checked the contract or got separate legal advice and "apparently" does not mean your taking their word for it.

I would be selling the one that is least positive geared unless there is a clear difference in future potential. But both on the market is probably a good idea given the time frame.
Have you considered a line of credit/loan against one to give you more time to sell the other block.
Learn from my mistakes...

Hi All,

I may soon start a separate thread about how commission can be payable to Qld Real Estate agents, even when they haven't achieved the sale! My own solicitor (and others in the real estate industry) have indeed confirmed that is the case in certain situations. :(

As for my two "splitter blocks", they are both now listed on realestate.com.au... You can check them out by clicking here: Murarrie | Clifton.

I've heard it said that "time in the market" is more important than "timing the market". I also used to believe that, given a long-enough time frame, all residential real estate would eventually make a profit. I now realise this view can be very dangerous!!

For example, if you are negatively geared and the property's value isn't rising more than enough to make up for it, then time is literally eating away your equity. And if the need arises to sell unexpectedly (or refinance to release some funds), you can end up facing the reality of a loss. Even worse, that loss is magnified due to leverage (e.g. if you have an 80% LVR loan, then a 10% market fall effectively costs you 50% of your equity!). :eek:

So in conclusion, and since we are in the Where to Buy section of the forum, here is a summary of what I've learnt from my recent experiences:
  1. Only buy properties in sought-after areas (ideally with an increasing population).
  2. It's best to avoid locations and properties that could give future buyers any reasons/excuses to not buy and keep looking.
  3. Avoid negatively geared properties, unless you are buying it cheap enough that you can resell it for a profit or make it cashflow positive (otherwise it's not an asset, it's a liability!)
  4. Ideally, make sure there is at least one way you can add value to the property (without depending on the overall market to rise).
  5. If the property isn't making you money, it's probably better to sell it and put that money into something that does.
  6. Don't consider a property sold until settlement completes (and you have the money in the bank).
  7. When borrowing money, don't let the same lender cross-secure multiple properties together [or else if you sell one, they'll revalue the other(s) and may want more debt reduction than you are willing (or able) to give them].
  8. Have a plan so you can avoid selling in flat or falling markets (unless you are buying something else that represents even better value in the same market... And in this instance, start again from Point 1 above).

As I say to my son, "Learn from my mistakes". I hope my sharing has been of some value. And Happy Easter! :)

Kind Regards,

Hey Jason

There is actually another lot up the road from you (36 Murarrie Road, Murarrie) that has been on the market for a little while and one that I was quite interested in purchasing. I am actually a town planner (for a private consultancy...not Council) and have been following the River Gateway Neighbourhood Plan for some time (to purchase soon to be rezoned properties @ current values). I know you are experiencing some financial issues and need to free up some equity, but I would recommend holding onto the Murarrie property if at all possible (for at least another year). I think you have underestimated the development potential of your site. Your site is to be rezoned LMR (which actually allows for units of up to 3 storeys and a Gross Floor Area of 0.8 x site area - 647m2 in your case). This could easily accommodate 6 x large 3-bedroom units. The Neighbourhood Plan will probably commence public notification within the next couple of months and the zoning changes are likely to be approved within a year. If I were you (and I didn't have other financial obligations obviously), I would wait until the rezoning has taken place, obtain the development approval for the units and then develop (or sell to a developer with approval in place). Btw, the other thing for you to consider is that there is an Energex substation planned directly across the road from your site (to be constructed within the next couple of years). The effect this has on property prices is something else to consider.