Would 3 or 4 Give Better Return

Here's a question I thought I had answered for myself,

I have a block in Essendon, Melbourne measuring 20 x 50 m.
The guy next door on same size block is nearly completed building 4 small T/H, 2 attic style and 2 single level, all single garage.

The question to me : should I follow with 4 small T/H or go for 3 good size T/H, with double garages ?
Factoring in that I have no intention of selling, so I am concerned about the long haul, not the quick buck. I thought I should go for 3 since they would be of better size, quality, and thus hold their low vacancy level longer and have a similar if not greater capital gain. BUT am I right here ? I'm not so sure. Still at the initial planning stage I can change my mind now, without too much penalty. So I'm interested in everyone's views. I should've put this to the forum earlier actually.

Which scenario 3 or 4 smaller would give best rent return ?
Which scenario would give best capital gain in the long run ?
Are there other questions I should be asking ?
 
Maybe you should look at the demographics for Essendon and see what kind of family unit currently lives there. If you are talking young professional couples, no kids you might be able to get away with a smaller unit and more of them. If you are talking couple + child a slightly larger unit may be more worthwhile.

Also keep in my how much yard space these units will have because my opinion is that people might choose a unit over an apartment because they might get a small amount of "backyard" or outdoor entertaining area. This means sacrificing this area to accomodate another unit might be a bad idea.

I can't see why you can't build 4 x double-storey townhouses quite comfortably on your land - I think you said 1000 sq metres?
 
Which scenario 3 or 4 smaller would give best rent return ?
Which scenario would give best capital gain in the long run ?
Are there other questions I should be asking ?
Guess a lot of people wouldn't be too concerned and just focus on the returns aspect but maybe it's worth while thinking of the social and environmental impacts of the options too?

Would having 3 SMALLER units leave space for more "backyard"?Maybe you could have a small "green" common area? Would going against the "build as many units etc on as you can legally squeeze" crowd give you more returns and better growth in the long run?

Might be idealistic but I'd LOVE to see developers building properties that will have a +ve effect on people and the environment rather than just their bottom line.

Cheers
Chris

PS This is not meant to imply that Patosan or Kev only think of the bottomline. Just my thoughts on other q's to consider.
 
My thoughts on the matter of redeveloping your block is if you build 4 townhouses on the block similar to the properties next door you are allowing those properties to dictate your market price.

This is an issue that I have with units. You lose control of setting your own market price on the properties (unless you own the whole block). So if you make your development different to those next door you then take the lead of setting your own market value.

Yes, I understand that you are looking at it from a long term point of view. What I am suggesting is that your properties should gain higher bank valuations as if they compare the properties next door your valuation should naturally be higher cause you have a better quality property. And gaining a higher bank val wil give you the opportunity to borrow more for further purchasing.

Anyway, just my thoughts on the matter.

Cheers
Robert
 
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