Hello all,
I am putting together an idea and are currently doing the research/due diligence before moving on this one (it is also my first attempt at investing so I am a little nervous, but I wont let that stop me!).
This is a little hypothetical but I will ask any way:
Scenario:
I know of 100 acres of land just outside of Perth. My research indicates that when subdividing in this area the minumum block size is 5 acres. Research also indicatates that approximately 10% of the land is “lost” to infrastructure, eg roads which leave 90 acres or 18 x 5 acre blocks. For this example lets assume that 20% of available land is lost and therefore only 16 blocks are created.A conservative price per 5 acre block is $250,000 (realestate.com.au lists a 5 acre block at $350,000 with phone and power connected. Blocks such as this are as rare as hens teeth hence I didnt find too many available for comparison on realestate.com.au)
So lets look at some figures:
Estimated value of land (100 acres): $1,000,000
Number of blocks created: 16
Value of created blocks: $250,000
Wealth created if all blocks are sold: $4,000,000
Profit (blocks – purchase of land: $3,000,000 (minus cost of infrastructure)My questions are:
1) What would an estimated cost be to install infrastructure?
2) Who could I speak to, to obtain this sort of information?
3) What other costs could be expected to be incurred?
4) What information/advise do others have on how to go about this project to avoid/reduce mistakes/pitfalls?
5) Have I missed anything?Regards
RayYou should first visit the Council and ask to speak to someone in the Building & Development Section. Ask them what the policy and fees are in relation to:
Local town planning regulations
Land zoning restrictions
Min. size of lots
Access to water and sewerage services. Do they need upgrading?
Setback requirements
Min. building envelope
Parks and open space
Easements
Vehicle access including Council refuse collection
Storm Water magagement
Increased noise from new development
Enviromental and heritage issues.
Do soil conditions impact on road/footpath design
Footpath
Lighting
Signage
Flooding?
Restrictive overlays
Erosion and silt management
If Fire extinguishers are required
Dust control
Water management plan during civil works
Headwork contributions to be paid $$$$$$$$$$$
How to lodge a Development Application (DA)After you have this information talk with a town planner who can guide you through the process which could take months/years from start to completion. You’ll also need the services of an Engineer and Surveyor.
Also consider how you are going to fund the holding costs while the subdivision is being processed.
Another option is to seek DA approval and then sell the block to a Developer.
You risk taking on too much for your first attempt at subdividing.
I can see your keen to do this but set yourself up to succeed by trying a small 1 into 2 lot first, then tackle something like this later.
Best wishes.Amanda
“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”
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