Hey,
There is a property up for grabs on my street with the land size is easily being about 1000 sqm.
It is on the market for $600,000. I have spoken to the real estate agent and they claim they have had one offer at $550,000.
It is a rundown 3 bedroom property and they are looking for a delayed settlement because the lady is moving into a retirement home, so I see the price having some amount to drop.
To me it seems like a good deal as units in a 100+ complex on the same street are selling for about $375,000.
I have my first owners grant to use but no deposit due to certain recent events that have left me in a tight spot.
Would it be possible/good idea to buy the property and put 2 properties on the block, sell one and live in the other? And would it be possible for someone in my position?
I am 20 and can’t say I am the cluiest so don’t be bagging me for my ignorance, I try, lol.
Maybe my idea isn’t even the best way to go about this, any suggestions would be greatly appreciated.
Cheers,
Jacob.‘Stay Happy and you’ll be Perfectly Fine’ – Jack
Do you know how many units/houss the council will let you put on? If they allow 3 you better not build 2 as the value of the land content for each may put you out of the market??
Have you investigated cost of building there yet? Half of 550 is 275 plus the cost of building a place. If it is worth 375 does that allow enough to build it and make a profit?
I guess a lot depends on the value of the existing home – is it good or should it be removed and start again? Does the asking price allow for this?
Phew!! so many questions and so little time!
Regards
GiddoHi Spi
answer the following question and let me do some home work’
were. state, streetwhats the zoning of the land.
what size is the land left and right of it and if possible are they interested in selling don’t give them a price let them tell you.
rough facing of the land north south east west
sales in the area get a brief run down from the real estate don’t tell him any of the above and don’t tell him your interested in this block ask if he has a exclusive option on the sale.
when you have the above send it to me at [email protected]
without all the above
I can’t tell you what its worth But with the above I can tell you within 1 day.
let see how it goeshere to help
Cheers and thanks for your responses. I am now looking into it a little further with grossrealisation’s guidance.
‘Stay Happy and you’ll be Perfectly Fine’ – Jack
You’ll need to do a fair bit of analysis before you know whether or not this makes a worthwhile development site. You say the land is worth $600K or less. How many units might you be able to get on this site? (Check the zoning to see what the council allows) At first glance, probably around 3.
Then you need to do a feasibility on the development. This involves the following
Calculate costs of acquisition – land cost, stamp duty, legals.Then calculate the following:- cost of getting plans etc, DA costs, council contributions (usually an amount per unit), cost of construction per unit, holding costs (rates and taxes), interest and establishment costs on a development loan (I assume you’d be financing it)
Then work out what you think you’d get for each unit (be conservative).
Take off marketing costs (i.e. agent’s fee on selling the properties) legals on sale, etc. If you’re going to hold them you can leave this off ‘
There’s also the cost of the subdivision if you’re dividing the block up.
You’ll also need to factor in the fact that you will get GST refunds on construction expenses but you’ll have to pay GST on the sale prices if you sell.
After all that (WHEW!) what does your profit look like? If it’s not around 20% most developers wouldn’t touch it.
Obviously, this is really general information and I don’t know whether you’re a builder or whether you’d contract someone so guessing at constructions costs might mean you need to talk to a builder first.
If your idea is to buy, build another house (which you mention) go through the same exercise above and see if it still makes sense.
If not, don’t despair – just keep looking. It can takes ages to find a good site, but when you do the rewards can be very much worth the effort.
Good luck and keep hunting!
Megan
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