Hi
I am considering doing a small development project.
I have my eye on an old house on a 1200sq block in a regional area in Victoria.
I was thinking about purchasing the house, subdividing the block, renovating the house, selling the house to lower debt then building a couple of duplex style 3 x 2's on the back of the block.I already own several Investment Properties but feel I may be ready to take the next step.
Subdivision is all totally new to me and I will need to do alot of research and reading before I am comfortable to jump into this.
Can anyone recommed any reading material that can start me off in the right direction. Remembering that I know NOTHING about subdivisions at all.
Any help or suggestions would be much appreciated.
Thanx in advance
Fingerscrossed
As a starting reference to development go to Michael Yardney's website and look up the 19 part series on property development.
http://www.propertyupdate.com.au/Also you can google 'Rookie Developer' and discuss things with Troy Harris who also holds a Melb property investor meeting pretty regularly.
Contact the town planner in the rural town and a good surveyor to discuss your plans and get costs and a timeline.
I've found in regional Vic that the end sale price, often being quite low and the build costs being high, restrict the bottomline quite severely so do your figures accurately. Also discuss with your local REAs what the locals are looking for and whether there is a glut of similar properties at present. It doesn't take many in these small towns to have an over supply. Consider also that 2km from the CBD is considered the same as 40km in Melbourne. Often its older people selling up the farm of large family house and scaling down. They can only get $200k for the house if they live in the town and have special needs. Need to be near shops, hospital, doctor etc.
Do your homework, talk to the right people, calculate your figures conservatively and see what your return will be. Then decide which direction to take. Develop for the market, not for yourself.
Best of luck.
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