Hi All,
Is there anyone out there who can post some info about subdividing. A relative (who has no property investing experience) has an opportunity to purchase a property adjacent to their PPOR and then subdivide it (possibly taking some land from their PPOR to make the block large enough for subdivision.) The idea is to knock down the current house, build two new ones and sell them for the profit.
They think this is a fantastic opportunity to make buckets of money and want me to get involved, so I’d like to get some solid info before I tell them what I think.
Is the process of getting subdivision approval difficult/tim-consuming/expensive? Can I find out whether such an application is likely to succeed before the property is purchased? Does this sort of deal really turn a meaningful profit?
Is the property bubble going to burst and leave me holding the bag? [
]Even if I don’t get involved they are likely to go ahead with this thing, so if I can give them some solid info to prevent them from making a terrible financial gaff, that’d really be good (they are related to me after all.)
Thanks!
P.S.: In case it’s relevant, the property is in Sydney.
Talk to the council asap – they should give you either a blanket no or a tentative yes. Also ask them to recommend a town planner/surveyor.
Where in Sydney?
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MelHi Sjs[
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This can be quite profitable if you convert the zoning to townhouses. This should raise the current property value of the project by a factor of 1.7.(instead of finishing up with 2 houses you could have 5 townhouses.] The council could give you access to a town planner in order to do this at a later stage.
First you must do a feasibility study and most projects can fall over at this stage.When considering this type of investment
1. In your information gathering and feasibility stages be very quiet, or others can take the advantage away from you or put up the costs of development.
2. Ring or visit your council and ask about zoning restrictions to convert the block that you own into a townhouse development. get their opinion on townhouse development in the area and if they would have any objections.
3. Do a title search on the other block, this will give you the name of the owner and information about easements, and other restrictions etc.
4. Check with a morgage broker to find out your maximum borrowing capacity.
5. Check prices of townhouses in your area via the internet or local agents.
6. Talk to a builder to get an estimate of building costs.
7. Check the capital gains history for your area in API magazine, cheap info but not necessarily up to date.
This should give you some basic info at minimal cost to you from which you can decide whether to take it to the next step.
I don’t have many website links for NSW, but try http://www.nsw.gov.au/housing.asp click on building and renovating, this will give you access to a title search ($15 to $25 approx in Vic).
The next stages are dependant upon the result of the feasibility study.
Hope this helps,Bryce Inglis
[email protected]
http://www.ipal.com.au
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