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The RP Data group is now live.
It is also open for more subscriptions, if anyone is interested now or in the future. Just send me a message.
Everyone who has paid should now have received their login instructions and email direct from RP Data to create their username and password.
Cheers,
Matt
Which affordable SEO tool would you recommend Freckle?
Hi, I am in the process of contacting everyone who has shown interest in this national subscription for RP Data. Everyone should have a status update in the next half hour or so.
We are starting this group from 1st April, so if anyone else is interested, send me a PM for further details, as it isn't too late to join.
Cheers,
Matt
Can't you use other sales in the same unit block as yours which will settle at the same time to demonstrate the value?
Hi Dan,
I have several developments in Gladstone. In Central Lane, that sounds like it could be too low density and the council may not approve it. Depending on the exact location and block size, you could be getting as high as 1 unit for every 100 sqm of land and 4 or more stories.
If you drop me a PM with your email address advising the street address I can tell you pretty much what you are able to build on the site and advise architects that specialise in this type of development.
Cheers,
Matt
Was the valuer HTW by chance? You want to make sure that the next bank uses a different valuer, or you will get the same result.
I have been in similar situations and did some research into which valuer gave the best valuations for that type of deal in that suburb. I then went with a lender that used that valuer on their panel.
The difference for me on the same sized development was $330k between valuers!! In my experience, HTW are the worst valuers, avoid them like the plague. Find out in advance if they will be the valuer.
I should add that the ideal scenario may be to do a corner block, with existing house remaining and add 2 x 2 storey townhouses. I did one of these last year on 868 sqm.
Another vote for the subdivision route. It is the ideal place to start with small developments. Often the numbers will stack up better to leave an existing house, even if it becomes a lower density development, rather than knocking a house down and building 3.
Just run the numbers and see which works best and that you can get finance for. The simple subdivision should cost alot less to do and be much easier to finance. Definitely chat with the council, to confirm if they require you to build to the higher density. I have experienced this before, where I enquired to the council if they would allow subdivision and they advised that they would prefer units.
Also for a simple subdivision, a corner block will work best, especially if you can get separate entries off different streets.
Cheers,
Matt
Sounds like a good cashflow strategy.
What sort of rental yields do you pay landlords and what do you rent them out for?
Do you normally furnish them also?
What do you mean by "maintain" property? Does this include repairs?
I'm not aware of this strategy being used in Australia.
Ok, I'll bite. What is rent to rent?
To answer your 2nd question, there is a great game called Cashflow, from Robert Kiyosaki. It is a physical boardgame, but there is also a free online version you can play here. http://www.richdad.com/Rich-Dad-Games/CASHFLOW.aspx
My understanding is that marriage wasn't the issue, just her being your partner and having kids together was enough.
I bet she now also receives a decent chunk of money from the taxpayer to assist in maintaining the lifestyle to which she had become accustomed.
The whole system is screwed up.
I think before getting too far down the development path and getting planning advice, do a quick back of the envelope estimate of the development cost vs end valuation.
In remote smaller towns, construction costs are often high and i would be surprised if the end valuation would justify the cost at current market prices and get enough profit margin to make it worth your time.
What are you hoping to sell a 3/2 townhouse for?
It really depends on where the development is. In gladstone where I am developing, zoning tells you everything and there are massive differences depending on what density it is. 1600 sqm could allow anything from just 1 house to 16 units.
While there are some overlays for things like wetlands, the process that council has been through to determine the zonings nominated as high density, has ensured that they are appropriate for this purpose.
There are other restrictions that you will face in VIC, like large trees, that aren't an issue where I develop, so it really is location specific. A good town planner or architect will know what the appropriate rules are, as well as how they are interpreted and under what conditions council are willing to relax what is officially written in the zoning rules. This kind of knowledge comes with their experience dealing with the council on a regular basis.
Hi Shahin,
My website will provide a number of free introductory lessons in property development, and if people like what they are receiving, they can subscribe for a full course, with a number of tools and templates.
I am looking to provide enough information to people to determine if developing is likely to be the right wealth creation vehicle for them personally, based on their circumstances and aptitude for it and everything they need to succeed. I will be seeking input from a range of professional experts.
Typical courses are $4-6k for a 3 day event. I am looking to provide an online version, with ongoing tools and network, for a reasonable monthly subscription.
If any professionals with experience in development are interested in being involved, let me know and I can provide greater detail.
Cheers
Matt
Hi Ross,
It depends on the zoning of the property, this will be what determines the density of what you are allowed to build. You need to check with the local council, or a town planner or architect/building designer who works in the area should be able to advise you.
You can definitely fit 3 x 2 storey townhouses, but single storey villas will be less expensive to build and appeal to a wider market. The zoning, setbacks, open spAce and parking requirements will determine if tHey will fit.
The future rental income can be considered by the bank for serviceability purposes. Are you planning to hold or sell the townhouses?
Also consider retaining the existing house and building a couple of townhouses behind it. Often this will provide a superior return on investment.
You want to make sure that you end up with the right bank that will treat this as a residential loan. It will allow a higher lvr. Shop around the banks and 2nd tier lenders or see a broker which has alot of experience in this type of development. Don't be a brokers test case though.
Allow 18-24 months for your first development.
Costs to include:
Turnkey build
stamp duty if purchasing the existing dwelling
surveying
engineering
building designer
council da and ba fees
council contributions
interest
Connections – water / gas / electricitypotentially gst – see an accountant who specialises in property development
legal fees
real estate agency if selling
rates
water
demolition
soil test
build permit
Construction cost varies greatly by location, build type and civil engineering costs.
Hope this helps.
Matt
Please advise not just the state but city / town you are building in as build costs can vary significantly between locations. The suburb will also assist with understanding the market and resale values.
I love the type of build you are doing, that is the same as i did for my first development. Being able to retain the existing dwelling really assists with the profitability.
Personally I have used my architect to submit for the da on each of my development projects and I don't see any issue with this, as long as you are within council zoning requirements and your architect has done work in that council before.
I don't know how an architect could determine what was appropriate to build without a good understanding of the zoning requirements.
Is your block flat or on a slope? What is the natural fall of the stormwater? Does the block slope towards the road or away from it? Are there easements? These are the types of civil works considerations that can quickly blow out your cost estimates and profitability.
Also allow for council contributions, in qld these can be as high as $26k per additional unit, plus da fees, engineering, da costs, ba costs, connections (water, power, gas).
What level of finish and materials will you be using? Aircons and fans in every room? Stone benchtops? What level of appliances? Who is your target market as this will guide some of these considerations.
One common mistake I have seen first time developers make is having too large and inefficient a floor plan, with wasted space. Unless you are in a high end market where you will receive a premium for a large build, try to keep it to the minimum build size with each bedroom still a double at a minimum (3×3 plus wardrobe) with a larger master.
If $1700 per sqm is correct for your area, an extra 20sqm per unit will cost an extra $68k that you may not get back in the sale price. There is normally a ceiling price that you won't get over for a 3/2 no matter how large it is. Areas to focus on to reduce size are hallways, laundries and balconies.
A qs wouldn't normally be required for a project of this size. Is the architect going to contract a builder or will they get multiple quotes for each trade component throughout the job to try to keep costs under control? I would normally expect a local builder to have a better idea of costs than an architect would. Maybe request some quotes / estimates from builders as well as this is what they do all the time and are likely to have both contacts and scale that your architect won't. You may find massive variations in quotes between them. On my first 2 townhouse build i had quotes between $500k amd $780k for the same specification. If you suspect that the architect's build costs are high for your location this would definitely be a worthwhile exercise.
When the government isn't doing anything to stimulate the economy, despite rba's recognition that it is necessary, why would you expect private enterprise to act in a way that reduces their profitability?
1) set up my website for aspiring property developers
2) finish another 2 developments and start construction on my first apartment block
3) quit my day job at 38, woohoo!!
There shouldn't be council contributions when reconfiguring the lots, as you are not creating new lots.
