Forum Replies Created
The answer, unfortunately is yes and no. If you control the design process you can control the costs. That is to say, if your brief is to deliver dwellings for $1,500/m2, that's a reasonable directive. This may come at the expense of parts of your wish list, but it can be done. Volume home builders can deliver dwellings for $1,000/m2 as long as they build enough of them and the design doesn't change. They rely, as the name suggests, on volume. There is not a lot of difference in a $1,500/m2 dwelling and a $2,000/m2 dwelling, especially if you are building for development profit or as an investor for ongoing yield.
How about "property development for investors"? I come across a lot of investors who want to get involved a property development but know little about it. With land scarcity issues infill development, in my opinion, will become ever more common and investors will drive the industry.
A budget of $2,000/m2 is fairly generous. Generally, conventional town-houses can be delivered for closer to $1,500/m2. Of course, you may have something a little special and that's a decision you – as the developer – need to make in the context of costs, sales and margins. To answer your question, the figures need to accommodate the prevailing rate. The additional metres may be a little cheaper, but in the scheme of things it will make little difference.
A town planner or property lawyer can quickly tell you if the title precludes the development of the land.
No worries.
Emma,
It's a vexing issue!
It's a combination of my own experience – I've built a lot of houses – and industry averages.
The industry averages can be found at BMT Associates (quantity surveyors) website. I have no affiliation with BMT, but I have used their services and their industry averages are comprehensive.
At the moment, for example, a 3br brick veneer town-house over two levels, and of a medium level of finish, built in Sydney, is costing $1,480/m2 on average.
Some projects can be delivered for less, and some for more. If your figures work okay with a $1,500/m2 budget then you can proceed with some confidence, knowing you have the ability to manipulate cost elements to meet your budget.
It is of course unlikely that this could be (legally) done without municipal approval, so talk to your council first. It will obviously raise issues with car parking. Generally speaking, council will not be too pleased with a proposal that will increase the use (3br to 4br) whilst decreasing the off street parking.
It may be that it's not permissible to put a duplex on the land, so ascertain that first. Often, in new estates, the land developer will protect amenity by implementing controls on title that preclude certain uses.
fredo_4305 wrote:So you are able to go to a draftsman to do the majority and he consults a town planner when required?It may work better the other way around.
Go to either a town planner or a designer experienced in town planning first, and establish the strategy (and so the brief) for the project and then engage a draughtsman.
tez.mars wrote:ChristianThanks for the reply, we also visited your web site and will start with a restrictive covenant search.
We do have a approved Precinct plan which contains design criteria and precinct text so i guess that may be useful when searching for a builder.Thanks again
Terry
No worries Terry. Some early strategic planning advice would also be useful.
See if you can find someone who services your area and can help you decipher the planning strategy.
The approved precinct plan will be the key in determining your options.A development and subdivision tip:
When considering a development project, submit it to the 3/3 test.
1/3 = Acquisition costs
1/3 = Development costs
1/3 = MarginIt's nice and simple. And it works.
Interesting.
In my opinion – and I don't think too many share it – the best thing we can do to make houses more sustainable is the stuff that doesn't cost a lot:
- Make house a little smaller. It uses less energy to make them and they, in turn, use less energy.
- Site buildings to take advantage of the sun and of prevailing breezes.
- Build eaves and other elements that provide shade.
- Build higher density closer to public transport and amenities.
Emma,
I can't give you any specifics on developing in Vincent, but some generic planning advice may (or may not) be useful:
- You will need to allow for relevant set backs as well as vehicle access.
- You may also need to allow for vehicle turning circles and other access issues.
- An early assessment allowance of 20% for "peripheral" land use is usually adequate.
- I'm not sure of Vincent specifically, but often when density gets to 5, there may be a visitor parking trigger.
Most of these issues can be addressed early on with some simple land use planning. In this case it seems it may be the difference between a yield of 4 and 5.
Hopefully you early due diligence will pay dividends.
In my opinion, property subdivision is no more or less difficult than say rebuilding an engine.
I am no good at fixing engines, nor do I have any experience fixing engines.
If I had all of the manuals and instructions, along with all of the necessary tools and I could afford the time and money involved in perhaps getting a few bits bolted in wrong way around, then I would have a go at that engine rebuild.
In subdividing property I have a team I work with to minimise the risk that things might get bolted together the wrong way around. I also have a set of instructions and a manual (a process) to ensure things are done in the right order.
The costs are important (as ever) but in subdividing property the early advice is crucial. Arriving at the best outcome for your proposal will make more profit than all of the best consulting advice will cost you.
Terry,
Yours is not an uncommon situation – got the right property, but not enough cash – and there are a couple of things you might consider to get things moving:
- Consider making a proposal for the development of the land, then selling part of that land with the relevant approvals.
- Do the work in getting the development approval then seek finance on an "as if complete basis" or as a percentage of hard costs for the works.
- Find an equity partner with the cash and expertise you lack.
- Plan and build the development in stages.
Good luck with your project.
Project costs are geographically sensitive, but here's some benchmarking that may be useful:
1. subdividing the land into three titles (and ongoing fees associated with having three titles)
It's not the first part of the process, however, the subdivision costs in isolation are not great – say $5,000/allotment.2. bulldozing the existing house
Give or take a few variables, around $15,000 for a regular house and outbuildings.3. getting plans and permits for the 3 new units.
Around $10,000 per dwelling for planning and working drawings.4. getting services, gas, elec, water for the 3 units.
Approximately $5,000 per dwelling for connections.5. estimating costs for the 3 units (i've been told $10,000/SQ is reasonable?)
In my experience this is generally closer to $1,500/m2 (and there are 9.29m2 per square)6. any other costs that I'm missing (which I hope aren't too much…
Town planning fees, driveways, landscaping, contributions, engineering, and maybe others like traffic engineering, arborist and hydraulics.Could I realistically expect to do the above 5 points for under $400,000? No. It is unlikely.
Best of luck with the project.
Tommy,
It's the (private) town planner's job to bring together the information and expertise required to complete a property development project. This might include, designers, architects, traffic engineers, structural engineers, landscape designers, surveyors and building consultants. The planner needs to put a coherent and compelling argument to the municipal planners (council) that will support your application and ultimately result in your project gaining municipal approval – without which there is no project.
Town planning is essential to profitable property development. It's not all that difficult, but it is fairly complex. Certain things need to happen, in a certain way and at a certain time. Breaks in continuity can be avoided by using a planner.
I do some work with Breece (he's getting a lot of mentions here!) and can also recommend his services.
The planning permit should accurately describe (in either words or pictures) exactly what is currently permitted on the land. 1,200m2, in a suburban context, could be considered fairly large land for a 2 lot proposal. Generally speaking, a higher density, say 1:300m2 would be more common.
As an American friend says "cut bait or fish".
The council rarely "owns" a covenant. In order to have a covenant removed, the beneficiaries of the covenant must agree to its removal. There are, in essence, three ways to have a covenant removed, and one of these methods is by making a planning application to the municipal authority (council) to have the covenant removed and/or to develop the property.
The council has little say in this; if the beneficiary objects to the application the council will refuse the application.
Some covenants are simpler than others to remove. Talk to a town planner.
