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I agree, Ikea kitchens are great. We did two in a pair of dual-key units we had about 3 years ago. They were easy, everything fit together perfectly. Great fun. And for what we got, they were incredibly cheap. Quality was excellent. At the time it worked out cheaper than Bunnings as we compared the two. And the best bit was that we ended up with some extra bits that we didn't need, eg shelving that came with a cupboard that we didn't need and a back for one cupboard where the hotwater system was housed. We took all of these bits back and got our money back on them – that was such a nice surprise!
Best suits a space where you only have a fixed wall at one end, so you don't have to try to perfectly fit an exact space. That would be a nightmare I think!
Will do it again as soon as the opportunity arises.
propertylearning
Hi all,
Thank you for suggestions/comments.
Craigsed, I do apologise if I made it sound as though I knew all about doing a duplex development. Of course I don't and that's why I sought assistance here. And, yes naturally there are other options including dual occupancies, etc.
My reasoning at making such a (presumptious) opinionated statment was that in fact for the additional equity we would gain from doing the strata titling cost of only around $10000 seems insignificant and would be worth doing. In our case the difference has been a bank valuation of 34% higher when they valued the project as being strata titled vs the second valuation as a one-line valuation, ie not strata titled – in our case a difference in valuation of $300000. So a cost of $10000 for a gain of $300000 in additional value seemed quite logical to me! I was really only referring to our own situation and didn't mean to imply that this would be the same for every situation. Perhaps I should have said "Why would anyone not do it in this situation". Our biggest frustration was that the bank would not accept the evidence provided that we would strata-title.
Of course, I agree if you don't wish to access this additional equity then you can easily not do the strata titling until/if you wish to sell either or both units. Saves a lot of other costs such as double rates, etc.
Anyway, now that I understand that the project should be being considered from a construction perspective rather than the end product perspective, whether or not it is stratatitled apparenlty becomes irrelevant until the point where you wish to extract equity or sell.
When/if we ever get this financed, I'll certainly let everyone know how it was managed.
Propertylearning
Thank you both for comments above. We've tried St G at your suggestion Terryw and they're response is also that they will now value as "one line". The gist is that there is no guarantee that the strata titling will ever be done. And yet I cannot understand why anyone would NOT do it, when the cost is so minimal compared to the total increased value of the development.
So this seems to be the new direction for duplex development.
Seems that now is perfect time given cost of financing, but will not be able to proceed. Very frustrating to be stopped by this when we have no problem with eligibility otherwise.
Any suggestions on how to acuiqre ~$275000 via alternative means, besides a loan shark of course.
Thanks again
Elka,
The thought was to sell third unit to ourselves at lowest possible price to reduce CG on initial development. Property would become PPOR and when sold down the track would not have CGT which it would if remaining in the trust and we rent from trust. We expect high capital growth in property.
If we can get it low enough, we would own outright (hence no non-deductibe debt) and would then borrow against it for further personal investments (ie shares) which would make all interest tax deductible. I know we can do all of that in the trust, but were just wondering about alternatives.
Terry and Richard you’re info seems to conflict, or is it that I can sell for whatever price, but tax office will deem a certain value or can we argue that value is cost price + $1, which would be cost of development of that unit I presume?
cheers
propertylearning
Thanks for response. So I am presuming then that you will still be liable for CGT?
Propertylearning
Interesting to read about the Big C. We are just experiencing something similar. Had pre-approval to borrow up to $550000 2 months ago. Had just found a property that we want to develop with 3 units eventually which went to auction last night.
I went to the bank just to check that everything still ok and also to arrange extended credit for deposit if we were successful at auction (we have $220000 equity tied up in PPOR which we are selling and due to settle in 2 weeks) and friendly bank manager decided to re-do finance app given that we had a more specific idea of what we wanted to do. We worked on purchase price of $600000. Our loans manager did not appear to have any issues with the financing of the deal and said that she would have confirmation back from (the dreaded) head office yesterday.
I remain stunned to this minute that I get a phone call about 3 hours prior to auction to tell me that we are now only able to borrow a max of $320000!!! All the same details were used for this. How can that be one wonders? Of course, no explanation from the bank.
The funny thing is that the property did not sell and am currently looking at alternative sources of finance. The bank’s offer of $320000 with our injection will still leave us short by about $50000.
Clearly there is a BIG lesson for us. NEVER NEVER NEVER rely on one source of finance!
Thanks for your comments.
On asking, have been told that the 80% LVR on boarding house is conditional on having all properties and won’t do boarding house above 70%without other properties.
Looking at alternatives for this finance now
Propertylearning
Hi Steven,
Thank you for you quick response. Yes, we seem to be caught here. Currently able to get the 80% on the boarding house, but can’t get the 90% on other two investment properties. Wondering why I can’t have both. Will take your advice and keep searching I think. Just seem to be running out of time.
Is this normal to have to spend so much time with financing? I never expected this to be such a pain. Especially when I’m so green with it all.
Propertylearning
