Hi Guys
Me and the missus have found a vacant block of land with views from the frontage. We have been looking for land around 400-600m2 to build a 2 storey PPOR and this baby comes in around 1500m2! Frontage of around 19m and depth of around 75m. The problem is its quite exy, but per square meter it would work out in our price range if we could somehow purchase just the frontage portion and the land behind used for units/townhouses. I think the zoning is R60
Anyone have any ideas on ways to approach the vendor to come out of it with just the front block? Would it would end up costing us more in the long run if we did it that way? The other option is to buy the whole parcel of land and then subdivide it and flog it off, keeping the front 500-600m2 for ourselves.
ANy ideas/suggestions/warnings would be appreciated
cheers
A couple of minor issues here katastrophe:
- if the land is zoned higher density, why would you wish to develop this at anything other than its highest and best use? The land is priced to sell for X number of units/townhouses, if you decrease the size of the block you will reduce the value of the remaining parcel of land as you may have taken away the capacity to build 3 or more dwellings. As a consequence you will need to reimburse the vendor by way of a much higer price than could otherwise be justified.
- why would you want to select a block which is zoned med density for a single dwelling – this is not wise esp for resale.
- as the land is zoned for a higher use, it is unlikely that council will a) allow subdivision for a single dwelling/duplex and b) approve the construction of less than medium density on the block.
- why would the vendor wish to sell less than the whole block?
- Why would the vendor wish to hold onto a less than developable/saleable block of 900 m2?
- what attraction would there be for the vendor to undertake a subdivision (DA) and build the access to the rear block only to get the same m2 rate as for the entire block?
Your first point is the one that stands out to me I guess.
The block is overlooking the river, which is why we would build on the frontage – plus a bit of a backyard. Resale would be there due to location I believe. Perhaps, like you say, the smarter way is townhouses (including the front), taking advantage of the zoning.
I guess what I was asking in the first post was there any way of negotiating with the vendor along the lines of, we'll give you 50% of their asking price on settlement, and upon sale of the other subdivided lots, pay the remaining 50%.
thanks IPF
Go to the local council and ask them what you can achieve on the property in question before you doing anything !
You may be able to use a right to buy option contract and then subdivide the block and on sell the sub divided block to a buyer
but there is risk involved
You risk losing the premium you pay to the original seller for the rights option if you do not buy it or can't on sell.
You risk of losing money on the sub divide costs unless you draw up a contract that if the rights issue fails you get back the costs involved in sub dividing the block when the original owner sells the sub divided block.
You need to employ a surveyor
You may need to employ a designer or architect to draw up plans for a suitable dwelling to get sub division, however you are creating a instant development site for the on sell to the developer buyer.
An options contract of at least 12 months may be needed to allow for council delays in approving the Development Application.
You need to get a good property law lawyer to do a buy option contract.
A letter of intent may be a way to approach the vendor with a proposal.
Find out what the vendor needs. Then you can work out what negotiation may suit the vendor !
Go to the local council and ask them what you can achieve on the property in question before you doing anything !Great advice duckster. Really appreciated
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