Hi All,
I am looking at a property to subdivide and build additional houses on the new blocks. What I find really hard is to decide on the houses to build and how to estimate the likely selling price of the houses. It probably should be the same process as estimating the value of a property by comparing it to other properties in the area, but I am very unsure about this. Any ideas?
I think you have answered your own question there;
I was going to say –
Look at existing properties with similar design, building size and block size that have recently sold in the immediate area. This is pretty much what a valuer would do. It may be worthwhile paying a few hundred bucks to hire a valuer to help you anyway.
If you work on an under-estimation of profit and an over-estimation of costs then you won’t go wrong.
As for design, look at lots of display homes in the area, existing homes to ascertain the more popular styles already in the area. Developer/builder websites and home ideas mags for the current popular styles and fittings etc.Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
Hi,
Not easy to do at all Bridgebuff – I’ve had a couple of goes at it but get cold feet because I can’t nail it down. This is the way I’ve talkled it;
Talk to as many REAs in the area as you can – maybe get them to show you through similar places on their books. They’ll also have an idea of what type of dwellings to build.
Get RPDATA on the suburb and try to guestimate (not always easy as the last sale prices might be in boom times or for slightly different dwelling types).
Also the neighbours can be an invaluable source as everybody these days seems to be up on their areas property prices.
Also if you are talking to builders about your development; they may have a good feel for the area or have done similar recently.
Also build in what you think the market will be like in 6-9-12 months when the development is complete. If your area has bottomed out then maybe your places will be worth another 5%-8% on top of what you think is fair now.
Cheers
Hi, I’ve spoken to a few developers in Perth. One was Craig Turnbull (6PR and author). He recommended open plan 3×2 with double carport or double garage. Two recommended going for a couple of extra courses to make ceilings higher instead of creating dog boxes. Another developer I know (he has about 30 properties) is currently building open plan 3×2 with theatre rooms in Landsdale.
A brilliant book is Australian Residential Property Devt. It gives you templates to work out every single cost to see if it is viable.
Thanks all.
Millions could you give me some more details on the book (eg author)pleaes.
Cheers
Author is Ron Forlee. I did a google search on it to find best price and more info on it as it was difficult to find on bookshop shelves. It’s a step by step guide on site selection, finance, getting advice, working with contractors, councils consultants and solicitors, costing, marketing and selling. He has another book An Intelligent Guide to Australian Property Development which was his first book that I haven’t read. Something else I’ve found helpful is talking to real estate agents in area and Town Planner in the local council. Some councils may have restictions such as with a subdivision all properties need street frontage, old house at front may need a carport and lock up area built in same materials as house. If you don’t know much about R Codes get info off council or google search. That will tell you about how much land is needed plus site coverage etc. I hope that helps.
Thanks millions.
I do have a very knowledgeable surveyor and have already talked to the relevant REA and councils.
But I feel the more I know myself, the smoother things will travel.
Bridgebuff, let me know how you go on your first venture. I’ve got two small development sites in Perth and still in process of researching and I need to wait for zoning changes to proceed. . It’s a lot more involved than I first thought but it’s getting easier. I’m planning on sub-dividing and selling vacant block as first project and second project developing and keeping as rental properties. Good luck with it.
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