Forum Replies Created
- Ballerina wrote:Hi NoviceInvestor
You should really put the whole feasibility together, prior to purchasing a block. We have recently completed 4 townhouse development in Camp Hill, so I know the area very well. If you intend to build, you have much more costs to cover then just a subdivision: certification, consultants, surveyor…Good advice. You need to assess all your costs and factor in how much profit you wish to make only then you can determine how much you can pay for the site.
Be prepared to do a lot of research and look at as many sites as you can. It took us eight months of searching before our offer got accepted on a 26 unit development site in Windsor. If it was easy everyone would be doing it. In fact the majority of small developers loose money because they do not know what they are doing. In developments there are many ways of loosing money.
I have been involved in close to 70 small developments since 2004 and none have lost money. Could be due to good fortune or good management.
Good luck
If the block is already on two lots then you do not have to pay for new sewer and water. These costs only apply to new developments.
To qualify for the savings you will need to get a solicitor to apply to seperate the amalgamated title. This only costs a few hundred dollars.You can then contact the council to install the services.
Depending on the land size you may not need a lot of retaining as you can batter away from the house. If the land is small then you will need to retain the block. If the neighbour has already built then you will need to keep your retaining wall away from the boundary. This will impact on your house design in terms of allowable width.
If is only a gentle slope away fron the street the head preassure will get water out to the street however, your yard gullies will not work so your back neighbour will get all your run off. Consider getting a underground tank in the front yard so the overflow should naturally drain to the street as long as the front as a slight slope to the street.
We usually use RP data to get an idea of what the resales are like in an area. We supplement this information by contact with local agents who give us feedback on recent resales and we also need to keep a watch on what volume is on the market, turnover time and percentage above and below list price.
In order to stay relavent we only concentrate on a hand full of suburbs.
We use the above information to calculate end values in our feasibility reports when assessing a potential development site. We also put the same amount of dedication and effort into assessing all the other parameters in the development feasibility report.
Using these strategies we recommended close to 80 development sites to out clients when times where good and it kept us out of the market over the last three years. However, now we are starting to see opportunities arise.
Property growth usually work in cycles and growth in a new cycle starts in the inner city suburbs and radiates out to the outer suburbs and then into regional areas. Therefore, to maximise your returns it is ideal to follow this cycle.
As an example the inner suburbs of Brisbane stated moving in late 2000 and ended in late 2003. This was followed by a boom in the outer suburbs which ended in 2006. Most regional areas went up around 2004. This cycle is largely driven by investors and can be traced back many decades.
I follow the same pattern when recommending properties to my clients. Therefore, between 2000 and 2003 I was recommending the inner suburbs of Brisbane and from 2004 I shifted to the outer suburbs.
I have not recommended properties over the last three years however, we are starting to see opportunities again.
Property investing is really simple. What you need is a good mortgage broker who can help you with funding and then based on what you can afford try and buy the best located property close to the median price.
Generally, you try and invest in a major capital city and try and be close to the city center or close to major road or rail network. My preferance is for good land content where possible. You also need to avoid buying at the tail end of a boom as you can end up paying too much. A flat or slow rising market is great as you have more time for research.
Be prepared to invest interstate as market cycles are different in each state.
Successful investors have been following this method for many years without the help of investment gurus. Most advisers charge huge secret commissions to developers to sell their stock so you need to be weary of who you deal with.
Hi Adam
Generally, a feasibility analysis is carried out prior to commencing a development project. This feasibility report should factor in all costs associated with the project and assessed against the expected end values to work out the return. If the feasibility shows a reasonable return then you move forward with your development plans.
Your cost should be based on actual estimates from consultants and contractors. If this is not possible then allowances need to be made for the various costs. The schedule of items will be based on the requirements within the project. Therefore, your report will need to be site specific.
I hope this helps.
It is quite common to see town houses or duplexes being constructed in back yard of homes in Brisbane. This is only possible on land that has a LMR zoning or the old Res B zone. Your title will show what your land is zoned as. If it is Res A then it will be very difficult to change the classification.
Hi Robby
Excellent way to get started on your property development journey. Over the last eight years we have recommended many duplex sites around the Brisbane area however, lately it is getting more difficult to find viable sites. Things to factor into your feasibility report when assessing a site:- Site cost
- purchase cost
- development costs
- construction cost
- strata cost
- selling and marketing cost
- interest
You also need to be certain of your end values as inflated end values can end up in disappointment, especially in a flat or falling market.
If you work full time or if is your first development then it is advisable to enlist the services of an experienced project manager. Almost all projects have its own unique characteristics that can trip you up so you will need to assess each stage carefully. Stay on top of things as delays occur if lapses occur.
Where possible buy second hand units with a good out look. Generally in a normal market a new unit will devalue to a level above older units for the first two years. Then the property will start to appreciate in line with the rest of the units in the area.
gurjjeet wrote:This house is mainly made of wood except the front face of house, I have heard of termite problem in Gold Coast but is it big n Coomera. I do not want end up paying for repairs every day outta my pocket. Thanks in advanceMost houses are made out of wood, unless you build a steel framed house. Even then you will have wood in your architraves and skirting. The brick external cladding that you see on most homes is just a facade.
If the sides of the house is constructed in weather board then it is most likely a man made material and should not be effected by termites.
Termites are everywhere therefore, what you need is a good termite control system with an annual inspection by a professional. This regular routine needs to me maintained to keep your warranty valid. If you have such a system in place then you need not worry about termites.
Do some research in the local area on what such a house in worth. Based on the block size the house can be a maximum of 190 sqm. A house this size on a level block should not cost any more than $200k to build. This is a typical build cost for a low set house with a turn key finish with inclusions such as two split system a/c, full security screens, ceiling fans, dishwasher, etc.
Now that you know the typical build cost do your research on land cost to determine if what you are paying is a fair price.
Please keep in mind that if you you are buying a finished product you will be paying additional costs over and above the land and build cost as marketing companies have to spend a lot of money to present the property opportunity to you. Naturally this cost will be added to your purchase cost as well.
Good luck with your purchase.
Dual occupancy will help you earn extra income. We can help you build a 3 bedroom house with a self contained granny flat for around $210k (220 sqm) turn key in the Brisbane area.
Do some research and see if this will work for you. I believe it will help you improve your cashflow.
hleung wrote:I predict a 6-7% increase in prices across Australia with Brisbane and Perth being the standout cities.Traditionally Sydney and Melbourne kick off early then soon followed by the other states. However, with all the talk of another mining boom could see Queensland and WA benefiting as well. I think Brisbane has had a longer stagnant period than Perth hence, properties in Brisbane could be regarded as better value.
You will need to talk to the bank on how to fund the development in the first instance. Due to the current lack of liquidity banks are reluctant in funding new developments. However if you have lots of equity or presales then you should not have a problem.
I will be bold and predict another two years of property growth.
The economy is improving people will feel confident and people will feel confident again in buying instead of renting. Historically all property booms have happened in the face of rising interest rates and this boom will be the same.
What happens at the end of the property boom?…well read the history books.
You do not necessarily need to buy a property from a NRAS accredited developer to qualify for the scheme. The scheme is open to all new properties that are located close to infrastructure. The Government have key areas that they are targeting for this scheme.
Therefore, you can look for land in areas you think you will get good growth then have the property assessed and if it is approved then you can go ahead with your plans of building. The benefit of using this method is that you will be making a small development margin and hence accelerating your wealth creation potential.
Most marketing companies are paid tens of thousands by developers to market their sock to investors therefore you will also be bypassing the middlemen if you are prepared to some of the work yourself. The good news is that there are companies that can help you get your properties assessed under the scheme and a NRAS approved property management plan.
Something to consider…
You will need to allow for re stumping, plumbing and electricity reconnection, stairs and decks and the usual council fees.
By the way we currently have a nice Queenslander that need to be moved from Banyo if anyone is interested. It has nice VJ's on walls and ceiling and a tin roof.
Most loan approvals are only good for three months. If it goes past that date then a re approval is required.
It is always best to re apply before the three months is up.
