I’m hoping someone can give me advice on this project. We are trying our hand at land subdivision for the first time and so need all the help we can get.
We’re doing our due diligence on a block of land in WA which can be subdivided into 20 lots. Total development costs have been quoted at between 30-40K. per lot The offer price puts the price of each lot at $20K . Blocks in the area are selling for $75K. Is this project worth doing? Is there anything we’ve overlooked.
Would truly appreciate all comments.[suave]Hi, I bought a block to sub-divide into 4 lots & 12 months down the track, still haven’t got approval yet.
Look into these:
1) the holding cost : your outlay will be around $420000. This means around $2500 per month in holding cost. Multiply this by the number of months before approval is granted.2) the site preparation may cost more than originally projected. Connection of services – do you know how much this costs?
3) assuming everything goes smoothly, the sale will take time. Again, holding costs plus advertising & agent fees will need to be included.
Sub-division is a wonderful way to buy at wholesale price so I say if the numbers stack up for you, then go ahead.
By the way, 20 lots is a fairly substantial project for a beginner if you haven’t done sub-division before.
Good luck.
Do you have to put roads, sewerage & lighting through the property to each block. Assume you have included this in your costing. It sounds a very big project to me. Do you have experience in building roads. Not to rain on your parade, I envy a project of this size and am interested in what experience you have to tackle it. There is one I am charry on tackling as it needs sewerage, gas electricity bought across from previous block, & what if we strike rock digging sewerage, but my partner says it is no worries and has given me confidence to maybe tackle it (depending on price they want for block)
Fern
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