Couple of quick questions…
1) I have heard that if you bought an old house for $400,000 and put up a nice new 2 story 4 bedroom (each) duplex, each duplex would be worth about $400,000. Does this sound right?2) How much would it cost to build such a duplex?
3) Say it cost me $400,000 to buy the land, then $300,000 (for example) to build the duplex. Total cost would be $700,000, but end value would be $800,000, how much would the back lend me to do this?
Dan.
If you want an extraordinary life you have to be prepared to do things that ordinary people aren’t prepared to do.
When Considering the costs of developing land you have to take in to consideration the site costs so say the dirt cost you $400k and you get 2 duplex’s on this site that’s $200k per site. you would then need to seek advice from say the local real estate agent as to the reasonable selling price per unit. You then have to access cost such as “Stuff Ups” allow say $10k per unit, Rate (Whilst Building), Interest, Stamp Duty, Legals, DA approval (depending on council but this could be expensive in more ways than one a lenghty DA enhances time related cost ie interest and Rates)Banks will assess rick to profit ratio. Most developers require between 20 – 30 % return to cover the “Risk” Factor.
The topic ‘Developing a duplex’ is closed to new replies.
