Hi
I’m sure there are plenty of people who have had experience in doing this.
I am looking at a block of land in regional NSW which is zoned for medium density and I want to look at the potential resale if I build two townhouses or a duplex on it. Without actually having plans for the residences, how do you suggest I get a rough price on building costs. Is there a cost per square meter that I can work on?
Thanks
‘Eat rich food, barbeque a yuppie’
If it is anywhere around Newcastle give me a call and I will put you in touch with some folks who are doing it.
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Thanks but it is in the central western region of NSW.
‘Eat rich food, barbeque a yuppie’
building costs vary a lot between states and areas. Go to a local agent and ask him the names of a developer or even a building in the area. talk to them and get the local figures.
10mins worth of calls, and you’re done.
Jas
I’l at Bathurst and might be of some interest.Tony
[email protected]Building Industry Associations often produce annual publications which outline the cost of labor, materials etc per square meter/foot for specific regions.
I am aware Rawlinsons offers a periodic construction handbook for New Zealand, it may be worth contacting them to find out if a similar publication is available in Australia.
[www.rawlinsons.co.nz/handbook.htm]
Alternatively, contact a local construction firm and/or quantity surveyor who may provide this information.
— Michael
Try one of the big mobs like masterton. that should give you some ideas on pricing.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks for the help guys, it has certainly helped. I will strat doing some homework.
‘Eat rich food, barbeque a yuppie’
We have been running a series of articles on property developing in our monthly newsletter that may assist you. As my company is currently involved in 65 individual development projects around Melbourne, I believe we are in a good position to advise on proeprty development.
Usually development costs are based on a cost per sq mt as you suggest but you will find it is considerably higher than the cost of building a standard display home. You must also consider the additional costs associated with a multi unit development that you don’t have with a single dwelling development such as subdivision costs and council levies.
If you don’t know the basics of costing you probably should not venture into development. Especially at this stage of the property cycle. By the way you can find out more about property development as well as property management from our newsletter:-
http://www.metropole.com.au/html/Subscribe.htm
Michael Yardney
Metropole Properties
http://www.metropole.com.auOriginally posted by MichaelYardney:If you don’t know the basics of costing you probably should not venture into development. Especially at this stage of the property cycle.
Michael Yardney
Metropole Properties
http://www.metropole.com.auThanks Michael for your advice, call me silly but I am going to go out of my comfort zone and give it a go. My father in law has done a few dual occ’s so I will be getting some advice from him, but I really wanted to do something a little different to the usual.
I see that buying +ve cashflow prop’s will be harder to do so I want to make money in a different way. I am not a total novice at investing (not a pro either, I might add!).
‘Eat rich food, barbeque a yuppie’
Originally posted by Rugbyfan:Thanks Michael for your advice, call me silly but I am going to go out of my comfort zone and give it a go. My father in law has done a few dual occ’s so I will be getting some advice from him, but I really wanted to do something a little different to the usual.
I see that buying +ve cashflow prop’s will be harder to do so I want to make money in a different way. I am not a total novice at investing (not a pro either, I might add!).
‘Eat rich food, barbeque a yuppie’
Rugbyfan – you are right, with the changes in the market it is much harder to find +ve cah flow properties and property development is a great way to achieve this. You buy/build your invetsment at wholesale prices and the tenants dn’t know this so they pay you retail rents.
My point was its a difficult time in the cycle for proeprty developing also and if you were not sure of the basics, you could end in a little bit of trouble. It’s great that your father in law has some experience. He should be able to guide you. Another thought is to find a development project manager who could guide you.
Michael Yardney
Metropole Properties
http://www.metropole.com.au>>My point was its a difficult time in the cycle for proeprty developing also and if you were not sure of the basics, you could end in a little bit of trouble.<<
In a way, a downturn is good from the point of view that it may be a bit cheaper to build as well as the fat that the completion time may possibly be a bit shorter.
Pisces133
RE: “If you don’t know the basics of costing you probably should not venture into development.”
Property development can be the most profitable facet of real estate, and should not be overlooked by anyone with a passion for this business – whether the person is experienced or not.
The key to success in property development is building a team of knowledgeable and experienced advisors – which will reduce risk and often increase profits.
As Michael touched on, when first starting out the day-to-day team may be limited to a project manager. As the projects become more complex, the team you rely upon will become more complex.
There are of course costs involved when incorporating professionals, however any feasible development [from the lenders perspective] will absorb these costs. Or a cost-effective option may be an equity arrangement with a key professional
, which can be done on a project-by-project basis.My point in response to the statement above is property development can be very risky, and does require a level of knowledge and experience. But the person with the idea/concept should not be discouraged because they lack this experience – although it would appear this was not Michael Yardney’s intention.
— Michael
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