Hi guys, just after some opinions on the following. Looking to purchase a double story house (IP) on 880m2 in Victoria. It is a bit run down, so just wondering about demolishing it and sub dividing it into two blocks of land and selling immediately. It is a corner block. Purchase price is $400,000, and if I demolished it, sub divided it, and sold it off as 2 blocks of land, I would get $300,000 for each block. Total of $600,000 Just wondering if there is a calculation developers use to determine whether a knockdown and sub division is viable. Also wondering about the costs involved like demolision, subdivision, taxes payable on profit and if the bank will sook up when they realise the house they loaned you money for is bulldozed and gone!. also holding costs. Any help would be awesome! thanks :”)
The bank will sook as the land the loan is mortgaged against is now 1/2 the land and half the value. So you will need to talk to the bank about having the loan across the two sub divided blocks instead of across one block.
You should talk to the local council about what it will cost to submit a DA – (or employ a private town planner – cost unknown)
You will need to employ a surveyor – for sub division not sure on cost – might be good to get quotes
Demolition – you will need a permit for this with council – cost unknown check with council
Demolition – get some quotes – I am guessing $20,000 but a quote will give you exact cost.
Taxes payable – Capital Gains Tax
GST on new property when selling it 10%check out http://www.rookiedeveloper.com.au
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