Help on proposal for 4 townhouses

Are you allowed to biuld townhouses on the land?

What is the council zoning?

I agree with Ausprop’s ballpark costings but then there are all the other costs including consultants, council fees, holding costs interest.

These may add another %40-%50K per unit

Get a proficient development manager or someone with experience to do a feaibility for you

Michael Yardney
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I’m curious to know why you quote $180-$200k for each town house? That sounds like a great deal more than I’d have thought.
I’ve signed a building contract for a large 4 br + study + lounge double garage + quality stainless steel appliances (dishwasher, stove, oven, rangehood, taps and sink) + some basic landscaping and everything I need for tenents to move in (like carpet, timber flooring, letterbox, clothesline, flyscreens, insurance etc…) for a fixed price of $183k (obviously had to supply land on top)

I’d imagine a 3br town house would take less material and labour, particularly if you are building 4 in one go. I’d have thought you’d get some synergy and economies of scale (ie casting slabs would pretty much take the same time for 1 house as for 4 close together).

Where do the other costs come in? My thought of price range would $130 – $160k depending on what finishes you used plus planning and permits, maybe an extra $20k or so for all that junk.

Is $760,000 (4 x 190k) right or would it be closer to $600,000 (4 x 145k + 20k)?

Hi

Around $1200 per sqm for townhouses these days so $180 to $200k is about right. Construction costs will vary between types of dwellings.

Your simplest type of dwelling is a low set brick and tile home and here you will pay under $800 per sqm for a decent turn key product. Prices increase as you go to a double storey and even more for a town house. Unit dwellings cost around $3000 sqm plus.

Having carried out numerous feasibilities on townhouse projects I have come to the conclusion that the only ones that can make reasonable profit out of these types of projects are builders or land bankers.

The vast majority of projects I looked at showed around 12 to 15% profit. I feel that you would to make double this profit for such a project to be viable.

You also want the higher return for the extra risk associated with such a large project as well as the longer time frames….although our projet manager managed to complete a townhouse project in Morningside in 12 months.

You need to be careful with your due diligence and ensure you have a good manager looking after your project.

Sailesh Channan

http://www.developersedge.com.au

“Helping you select,develop and profit from property”

Hi!
I am doing two backyard subdivisions in Melbourne. I find that it is profitable to sell the land rather than build and sell. In Mooroolbark area of Melbourne, I can sell a 600 m2 back yard for say 120-130k. If I build a 3 bed basic house, it costs about 150k (with driveways/landscaping) totalling say 280k. I can only sell it for 275-280k. So why build?

In Forest Hill area probably there is margin of about 40/50k for building a house and selling.

Does it mean a development outside say 30kms of Melbourne is only profitable for a builder owner or if only undervalued land is sold out?

Please help me clarify the thoughts.

Rocks

You would find few constructions costing less per square metre than one built by a bulk house building company. They build to the minimum legal specifications, and don’t really expect the houses to last long in the scheme of things. They also have a cookie cutter approach whereby they use the same few designs over and over – cutting down on design and engineering expenses, and they are able to buy their material in bulk as they build hundreds of these properties each year.

For a new development, you’re starting from scratch. You will need to consult a designer/architect, engineer and hire someone to oversee the project. You don’t have the same economies of scale, even if you are building 4 townhouses (this is a small development as far as suppliers are concerned). Expenses are naturally going to be higher per square meter.

One thing that I imagine your 4 bedroom house has is a lot of big glass windows in every single room. This is cheaper to install than brick wall, which is one of the reason why big builders go overboard with floor-to-ceiling glass windows. Townhouses, on the otherhand, are compact living spaces that exist side by side with other townhouses. Structurally, practically and for privacy there needs to be a greater brick to window ratio.

A small townhouse *is* usually cheaper than a large house, just not on a *per square metre* basis. How big were you planning on building these townhouses? Generally they use space very well, so even a three bedroom townhouse can be under 100sqm. This is one of the reasons that good design is essential – to give tenants everything they need in half as much space.

And size of backyard is pretty irrelevant, as this is not part of the square meter cost.

Hi there i’m excited – expect that there will be lots of problems, that way when they come you will handle them better.

I am about to start building 22 x 2bd townhouses and have neg. a fixed price building contract with a great building company in SE QLD.

I know my resale price and predict the profit (best i can +-5%) so i will give the building head aches to some one else while i focus on other things.

resiwealth