Yes, it's a busy time of year alright.
And thanks DWolfe for the recommendation. This is the first time I've read the posts for a couple of weeks.

The first and most important thing you need to do Frankston Fella, is to understand the planning overlays for the specific area. Different areas allow different densities. Proximity to services and transport is usually a good indicator of higher density overlays.

A corner block enjoys set back dispensations and can also allow titles without common property if designed well. A density of 6:950m2 (1:158m2) would be unusual but perhaps possible in higher density areas.

Good luck with it.

Yes, you can. Just. And DWolfe, I would also endorse your Sunshine recommendation.

Hi Simonehelene,

Some great advice from Trev there.

Ultimately, having a plan is the most useful thing you can do.

There are professionals out there that can help with all of the elements that need to come together for a successful development, but you – as the developer – need to have the plan and the will to carry it out.

In the first instance you need to assess whether the property can be legally and practically developed as you propose. And, of course, be done profitably.

Some really rough rule of thumb to get you started:

A) Assume a density of 1:300m2. This won't always play out, but it will usually.
Assume build costs of $1,500/m2. This is a good starter and will provide a reasonable level of finish.
C) Assume a further 10% on top of this for infrastructure.

Put these together, and you have enough information to know if you should further the research.

Happy hunting.

Hi Tahlie,

It's not that difficult, but it does need to be clearly laid out, and all the important details agreed.
What you are really proposing is two transactions:

A) You will buy land from "his mother"
You will build a new dwelling for "his mother".

Any discount being proffered in either direction can be captured within these two transactions.
There will be a transfer of land when the land is subdivided, which will trigger stamp duty.
If this is mother's PPOR one would expect there is no CGT on the sale.

My advice would be to draft a simple HOA (heads of agreement) for each of the transactions, outlining the expectations and responsibilities of each party and take this to a property lawyer to formalise the agreement.

Sounds like a good opportunity, good luck with the proposal.

Hi Joe,

What you are proposing to do is to become a property developer.

And as pointed out above, your primary responsibility (after getting the right financial structure sorted) is to get the right team together to deliver your project. You will need sound advice around the design and delivery, and of course it all has to fit within the state and municipal planning requirements.

My advice to you, at this stage, would be to write down your plan even if you don't yet understand all that you want to achieve with your first subdivision. This way, you will have a useful stepping off point for the early consultations and hopefully your initial goals will largely remain intact.

Property development is expensive and complex, but in my opinion it need not be difficult. So determine how much time you can put into the process, write down your simple plan, and best of luck with the project.

Old Man Jim,

What you are proposing is reasonably unusual in my experience. If this is a suburban property there will almost certainly be a need for a TPP (DA) for the subdivision. The Rescode density requirement is (generally speaking) 1:300m2, but this doesn't necessarily mean each allotment needs to be 300m2, rather that the sub-divisible land should support the ratio.

Everything else being equal one would assume that two separate houses on two separate allotments would be considerably more valuable than two houses on one allotment. You may not need to sell one to realise the value, instead you might consider subdividing and revaluing the separated properties as they would then be separate securities from the financiers point of view, therefore your equity will have increased and your ability to leverage will have improved.

Best of luck with the project.

Hi Rookie,
If you don't yet have a TPP you will most probably need one to build your duplex. If that's the case just make sure your architect/designer is familiar with planning laws and processes as well as design.
Best of luck with your project.

It is incumbent on the financier to ensure they are protecting their shareholders from any unnecessary risk. This means they may lend to you if you can show how their risk is mitigated.

I have purchased unfinished properties, but the process is not simple. There needs to be a professional analysis of the status of the building and all of the permits and insurances that go with it. In my opinion it needs to be a real bargain to make it worthwhile.

Hi Sash,

In considering the value (or otherwise) of land fit for development, the following is common:

1. Find the right property by checking the zoning and overlays will suit the purpose.
2. The first exit point can be the issuing of the TPP (DA) and if done well will generate significant profit.
3. The second exit point is the sale of serviced and subdivided land. This means you, as the vendor, can sell smaller parcels to more people.
4. The third exit point is the sale of the proposed dwellings, as a house and land deal. This can be done by selling the property for a set amount "as if complete" and the purchaser enters into a contract to build with a builder who you have already negotiated contracts with.
5. The fourth exit point is the sale off the plan, whereby you take on the building risk.
6. The final exit point is the sale of the completed properties.

As pointed out in the thread, the value attributable to any of these exit points is really dependant on how well the figures stack up. Anyone buying land with a TPP will generally have a good handle on all of the development costs, so your assumptions about costs, values and risk will need to withstand some scrutiny.

In the case of buying or selling land with a TPP it is also common for the vendor to proffer, or the purchaser to request, the project feasibility analysis for the property.

Hope this is of some help, and best wishes in your endeavours.

Hi J,

Sound advice from Shannon. Always determine two things when considering knocking out a wall:

1. Are there any services (electrical or plumbing) in the wall. It's dangerous and potentially expensive if you find these the hard way! When you have removed the linings you will be able to see if any services are present.
2. Ascertain if the wall is bearing any load. Again this could be embarrassing to learn the hard way!

As for removing the tiles, they do sometimes come away in large sections on the sheet to which they are attached. That's to say you could try removing the whole sheet rather than individual tiles.

Good luck with your project.