Hi all,
My husband and I have a 780sq metre block with an old clad house on it. We are considering knocking it down and building a duplex on it – sellling one immediately and living in the other for at least a year.
I am finding it difficult to get past the risks as we will have to borrow the entire costs and interest payments. We have somewhere to live for free though during construction. Initial quotes are for 400-450K for both residences. I am assuming that is all inclusive.
This is our first foray into PI and we are pretty nervous and unsure if we should take the plunge. Also – I am finding it difficult to gauge what we could hope to get for the duplex once completed. I have been told it would likely reap b/w 100 and 150K profit (for selling only one residence) Does that sound feasible? (NSW and Illawarra is where we are – Woonona 2517) Hopefully proces will go up this year while we build…….she says ever hopeful!Iam also trying to descide wether to go for whole project price (marksmen/clarendon and the like) or to get a design done myself. I was thing of paying Marksmen $500 to design and cost it and possibly one or two other similar comanies to compare the costs between the three. I don't want to have a design completed and then find we cannot afford it once it is costed.
As I have no experience in this area we thought having a building company complete it for us would be the way to go – especially with the more complex council issues.
does anyone have any thoughts or esperience in this and could offer this newbie some advice.
it would be much appreciated.Hi Cashwalton,
Nothing like starting off serious! I think it would be a good idea initially to liase with a few agents in the WOllongong area (do you get on ok with who you bought off origianlly!?) and see if they can give you soem 'hardcore' figures on what similar finished products ot exisitng similar ones hae recently sold for (not just heresay or "i reckon' type prices) Also check out allhomes.com.au under research for recent sales figures too nearby. THis will give you a good idea as to whether this project may be worth pursuing before you put any serious money into it. Regardless, all the best!
Is it possible to have 2 freestanding townhouses, rather than a duplex? People would pay more for freestanding. From what I have seen there is no difference in construction cost.
Alternatively is the house in a position on the block that you could build a second property at the front or back and renovate the existing property?
These may turn out to be more profitable options.
i am in se qld,and am trying my first investment soon hopefully also,i want to build duplxes like yourself.but i suggest u contact your town planner and online planning scheme.to give you some ideas to question them about,here are some hurdles i have to deal with in se qld.
1- zoning- are in in a low/med/hi density residential area- if u have the wrong zoning u will need to apply for a material change of use for the block and submit that at the same time as your d/a application.some councils will reject this,some are fine depending on the area your in.
2- minimum title size- here we have a minimum title size of 400m2 on a low res block + common grounds + common driveways.so that means here we have a minimum block size of 930sqm to duplex as bare minimum.medium density can be as low as 300m2 per title or upto 4 titles per 1000m2(it used to be upto 6)
3- common property – here we have a minimum driveway size of 8m wide,bloody stupid,but its true for duplexes.
4- d/a times – depending on your zoning and proposed development type your duplex can be code assesable or impact assessable.this can mean a 3-5 months approval time to a 6-9 month approval time,so as your financing all of the costs,this means extra holding costs.
5 – build times – res builders can contract out to 8 months to build a duplex,whereas a good commercial builder here can do same thing under 3 months.
6 – pricing – cheaper is not always better if it takes twice as long,which means holding costs. a res builder here is about $1000 per sqm,commercial builder is $1100-$1200 per sqm,but can build in less than half the time,so the commercial builder is better overall.
7- check your planning and headworks costs on the project
how much are duplexes sellign for there? my costings from start to finished and sold for a duplex will cost around 480-530k with end sales of 600-640k.u must have very good sales prices to make 150k clear of profit of just one half of the duplex and after taking into account holding costs on the one your living in till it sells.
my very quick check found http://www.planning.wa.gov.au
No living costs and moving into mothers house. Some great suggestions there. Thanks. I hadn't though of a commercial builder. I had though of buidling using and ICP (insulated concrete form) to speed up the build process. selling now for about 480K to 550. I will keep investigating. Hopefully the market will rise also while we are building – ever hopeful.
I am 41 hubby 48 with two x two year olds and no super much as we lived in the UK until 3 years ago. So this is all about making some inroads/investments and getting rid of our mortgage ASAP.In my experience it pays to do some simple research right at the start. Perhaps find a planner or architect in your area and ask them to prepare a very simple land use plan that you (or they on your behalf) can take to the town planning department of the local council. Butting heads with the council on planning issues is much cheaper earlier rather than later.
christianb wrote:In my experience it pays to do some simple research right at the start. Perhaps find a planner or architect in your area and ask them to prepare a very simple land use plan that you (or they on your behalf) can take to the town planning department of the local council. Butting heads with the council on planning issues is much cheaper earlier rather than later.before you do anything like this,first see your town planner,he is gold for developments.
tell him the lot number,he will do the rest,u just say u want to duplex it,he will then tell u the sewerage issues if any,the land slope and so on and so on,and any issues your current council may have with multiple dwellings in your area for eg.
best thing to do is,see the town planner,then work out how u can build the project inside budget to meet his requirements.once u have done a very very basic mud map at home of how u want to make it work,then talk it over with him again and then he can submit a pre-approval,in which he will draw a basic layout design of the planned development,which they will take to council for a meeting,council wil review it and give
-a very basic yes or no
-impact or code assessable situation
-and ammendments required
etc etc.if they have said yes,then u can go forward with a full d/a application and wait the 3/5/7/9 months till thats gone through.then u must submit a building approval with full plans etc and then move to construction.
hope it all works for you.
p.s – do NOT do a development feasabilty on the hope of price rises unless your very sure,do the research on current sales in the area for those dwellings.also u must factor in some margin for price drops aswell.
to forsee a price rise in the current market is very brave,a lot of people forecast 20-40% drop in prices still to come,and with good reason for the forecast too if u look at the current real estate demographic and stage of the cycle that the market is in.
if u can afford to hold it all till prices rise again,then ur all good,if not,do your feasability on conservative pricing,and if it rises you hit the jackpot.
I agree with JHall's advice about the town planning department at your council. These guys are a great source of planning information and advice you can get for free. We pay them to be there to answer questions regarding town planning, and they are generally happy to help and at least get you pointed in the right direction.
One caution however; in my experience, there is a demonsrable difference between local council overlays and development rules, and those of the state. It is as good as impossible to overide state planning legislation, but local council planning schemes that do not concur with state schemes are not so difficult to work around. This can of course mean that some of the information you may recieve from the TP department of your local council is not necessarily complete and transparent advice.
How much does it cost to meet town planner to draw a draft??
An architect or suitably qualified dratsperson should be able to research and prepare land use digrams for $1,000.
christianb wrote:An architect or suitably qualified dratsperson should be able to research and prepare land use digrams for $1,000.thats correct,i have been to t/p this week for this reason and was qouted 1000-1200 for the pre-approval plans drawings and submission etc.
that said,i have been to him twice now for in office meetings and it has been free so far.so be afraid to get an appointment and have a chat about your plans.
by the way,just to rpevent confusion,i dont mean the town planner at the council,i mean a private business town planner,however if u do your research u can find out who the planners are on the council development approval committee.
my town planner after a few discussions the other day finally gave me the number for a planner here locally who is the the dev committee for council,so now i can ring him and run things by him to ensure it will be doable,since he is the one who approves it,i can crosscheck before i even have to submit it.thats what you want if u can find out the right people.
Hi Cashwalton,
Woonona is a great place (its where I live). I am about to start construction on my own investment property here. Talking to local agents is a great way of gauging property prices. A good agent will give you details of recently sold property similar to what you propose to develop and the SALE price. Maybe contact Dignam in Thirroul, they seem to be BS free.
Construction costs – Relativity Flat site, simple build, medium level finishes, we work on about $1400 to $2000 per square metre.
Building 2 duplexes should reduce the square metre rated based on economies of scale.Looking through the Realtor you’ll notice unique well designed villas/duplexes are selling up to $200k more then a project style villa/duplex of the same size. These unique properties do not necessary cost more to construct.
If you would like I could have a look at your ideas and help you discuss some solutions. I am also an architect and understand how the loopholes with our council work.
Email me at [email protected] if you’d like to have a chat.
David.
As a newbie, I have learned a lot from this discussion. I have invested on a property and I was also thinking of it as a duplex. Everyone's post provided a lot of points about advantages and disadvantages as well. Thanks to all of you.
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Fat Loss 4 Idiots TestimonialsDavidSMorris wrote:Hi Cashwalton, Woonona is a great place (its where I live). I am about to start construction on my own investment property here. Talking to local agents is a great way of gauging property prices. A good agent will give you details of recently sold property similar to what you propose to develop and the SALE price. Maybe contact Dignam in Thirroul, they seem to be BS free. Construction costs – Relativity Flat site, simple build, medium level finishes, we work on about $1400 to $2000 per square metre. Building 2 duplexes should reduce the square metre rated based on economies of scale. Looking through the Realtor you'll notice unique well designed villas/duplexes are selling up to $200k more then a project style villa/duplex of the same size. These unique properties do not necessary cost more to construct. If you would like I could have a look at your ideas and help you discuss some solutions. I am also an architect and understand how the loopholes with our council work. Email me at [email protected] if you'd like to have a chat. David.1400-2000p/m is failry high,they must be pretty hi end duplexes for that money and would need very hi end sales values to make it viable.i assume thats turn key and landscaped etc and just add headworks and land costs etc on top.
even so if that was in qld thats
say 150sqm 3 br dwelling x 2 = 300sqm
300sqm x $1400 = 420k / or 300 x $2000 = 600k
land usually 200k
d/a = 10-20k
headworks = 30k
total = 660k or 840k + holding costs of project for 12 months of 50k+so end sales per dwelling need to be nearly 400k to 500k+ each to be profitable vs costs.thats a bloody expensive duplex imo. thats great if they are selling for that much down there,would never ever get that here even for a ritzy one.
commercial builders here are 1100-1200p/sqm for mid level duplex builds.
Thanks all – very informative. As it is our first attempt and we have two yound children we are mostly inclined to go with an all in quote and build to finish and see how the quote looks. We have heard only very good things from many sources for one of them. SO we shell take another small step or two and see if we are brave enought to take the plunge. Thanks for all the info and ideas. Lots to think about!
So we have a firmer quote for 511K for demolition and everything except carpet, landscaping etc. Might look at own demolition (another independent dem co.) so see if we can keep the costs down. We have for this price for building 2 x two storey double garage 2 bathroom houses. One is 197 sq the other 201 sq. So I think the price based on the above comments is fair. Top level inclusions also. They would share a common fence only – so dual occupancy rather than duplex which I would think would give us a better re-sale ie selling a free standing new house as opposed to townouse. It is so far looking feasable to get a loan. I have calulated a worst case scenario on interest payments of 11 months even though quoted 30 weeks build. Oh and we woudl then do the strata ourselves at then end which would cost another 2K or so I am told. Suggested that we may be able to sell off the plans once approved – but I believe if we can see out the build and holding costs that it will benefit the sale price as we are going for top level finishes – and to see it in real life should assist the sale. any thoughts…..
Cashwalton,
It seems from your posts that you intend to act as "project manager" for your project – and this is a good way to save money – but also means you need to know what you are doing.
In order to know what you are doing you need not understand every detail of every part of the project, but you must understand the process so that you don't get in your own way! I suggest generating a project plan and then assessing exactly what you will personally attend to within the project plan, this should also help to avoid over-committing and potentially slowing down your own project.
The best way to understand the process is to devise a project plan and timeline so that you can monitor progress and ensure that each step is completed in due course. You are also talking about a relatively large amount of cash for which you are ultimately responsible, and again, the project plan is your key to staying on or close to budget.
Hi I am a newbie too and just in the process of buying a 40’s villa on front of 1012 block so can subdivide or green title and build behind. My question is that I was told by agent that the back house has to have a turnaround space for the cars out of the garage so they can drive out of the driveway facing forward rather than reversing, which of course means cutting into the size of the house or garden. Is this a common thing or just our council in WA?
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