Neighbours’ home for sale

A mate of mine leases out the house next door to him (though in his case I think he may own it outright). They went exclusively through a PM so the tenant doesn’t even know their landlord lives next door! They were concerned that the tenant would feel uncomfortable if they knew, though personally I’d also be concerned that the tenant would feel overly comfortable. That is, if you get too friendly with them, they might get slack with paying the rent and it’d get to point where you’d be paying the PM for nothing (i.e. the tenant is more likely to come to you if they see you watering your flowers every morning). That said, if it’s only one property it’s probably not the biggest deal and you could probably get away without using a PM for that property (especially if the tenant is going to know you own it anyway).

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Jeremy Lunn
Melbourne

Hi Celivia,

I’m a Drafting Manager for a residential builder. Over the years, I have dealt with many sub-divisions and disappointed clients when they realise that they can’t actually achieve what they had hoped for after having purchased a property they think can be sub-divided or redeveloped. Not meaning to dampen your sprits, but after reading your post, my first and foremost comment would be – prior to entering a contract to purchase the neighbouring property, contact your local authority to ensure you can achieve your aim. There are residential building codes, local by-laws and the like that dictate the minium sizes for blocks of land and so forth. So, I’d suggest some research into what you can / can’t do would be wise. Where the residence next door is located on the land may also be an issue, as there are requirements as to minium distances from boundaries, minium requirements for outdoor living areas etc. The list of potential issues is vast, and without knowing the situation, it’s impossible to be specific.

From an investment point of view, it may also be wise to investigate the cost of the proposed re-allocation of land. You may find it to be quite costly (varies from state to state). Then in relation to the value of both properties, are you left with a favourable outcome? There will also be surveyors’ fees, fence relocation costs, cost of restoring gardens etc.

Hope this helps
Cheers
Kym

Celivia

Kym is right about sub-divisions being more complicated than most investors appreciate.

Once option subject to you minimum boundary clearances is to re-align the boundary on your neighbours side incorpating the strip of land under your title.

You will probably have to purchase the property first to be able to do this or your neighbour may have CGT issues if he merely sells you a strip of land.

We have done this alot with many blocks in and around Brisbane but as always check the local Town Plan as to what you can and can’t do.

Cheers Richard
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