Subdivision More is better?

HI dengon…

you have more than just a few issues to consider with this one. obviously the first relates to the zoning and allowable Gross Floor Area of the site in question…some councils allow a higher GFA if close to major arterials and railways. On a 1200 block in Brisbane where I am you could get 6 decent size townhouses (100m2) or more if near in the right spot where the GFA increases to 60-70% depending on lcoation. Saying that, if you’re talking 4-5 homes then you obviously can get some very large townhouses which leads to questions about the quality of fit and finish. a large townhouse should be well fitted out (stone benches, s/steel appliance, luxury fittings in wet areas, aircon or heating, downlighting, automation?? and the like) and hence is in a completely different price bracket.

Second relates to your statement about subdividing…by subdividing i take it you mean you intend that all your townhouses will be on separate title with no common property??? this can be a valuable selling point – particularly where related to very large t/houses however creates a lot of headaches in the planning stages as not only do you need to apply for the subdivision, but each property will need to satisfy council requirements individually and therefore you cant get away with shared services etc…(this may be council dependent).

The easiest way to figure out your answer (though still not simple) is to work out your sale price (or rental yields if you’re keeping them) by comparing to others in the area…if selling, four can be better than five if they are the right size and spec level for the area and therefore can get a much higher price. However, if the area is not right for large high spec property then 5 smaller low spec will more than likely give you a better price as if done right as its not a great deal more materials-wise to construct. Similar story if your hanging onto them…your gross weekly rent and projected capital growth will help. I do suggest you think about engaging a quantity surveyor preconstruction to help with the figures (if you haven’t already).

If you’re going to body corp them, then 5 will be cheaper overall as the costs of maintaining and insurances are split among more propertiesand this may be tax advantageous??? – but talk to depreciation specialist and tax agents for that sort of advice.

i haven’t re-read all this to see if it makes sense but i hope it helps somewhat …

cheers
turtle[biggrin]