I am currently in the process of purchasing my first property and am looking to develop the site. The property is on an allotment of approx 575m2 (17.5m x 32.5m). The existing house on it is an old weather board house that is in pretty poor condition and probably won't be worth saving.
My question is on that size block will I be able to fit 2 town-houses or 2 units and what would the approximate cost range be for each?
If I were to get the subdivision and all the plans and permits done and then sell them "off the plan" what sort of financial outlay would I need to do that? do I have to pay anything for the building and then get paid on completion or does the buyer pay it all up front??
Any advice or information would help greatly!!
It depends on where it is located. Without knowing what council the land is in, no one will be able to tell whether it can be done or not. Sure you can fit them on, but whether the council allows it or not is another matter.
Cheers,
LukeHi Reen,
Gee you're brave! Buying a property to develop on and not knowing whether the council will allow it. What's plan B?
Suggest you have a look at whats on offer for new property developers at http://www.rookiedeveloper.com or you can access them at http://theblockblog.com.Plenty of great information there.
Ring your council, ask for town planning and ask what is the smallest land area you can subdivide to build on. They will have this information on their website, but quicker to ring and ask.
Regarding costs, developing requires a bit of cash or at least access to it. You need a spreadsheet to calculate your figures and you need to get educated really fast or you will have a property that is too small to fit 2 units on, or you will be building the units at a potential loss, because you haven't crunched the numbers to see if there's a profit in it.
Be careful.
Ian
http://theblockblog.com
Free Property Info, Tools & Resources For Investors with a Sense of Humour.Well the property is under the greater dandenong council. I assumed that subdivision would be possible as the house across the road had been subdivided and has had 2 double story town houses put on it. I was going to call and confim this just haven't had the chance.
Hi Reeeen,
It is always worth having a look at what zoning the house is in, and then look at the guidelines that apply to that zone re: subdivision. The zoning can change from one side of the street to another.
Any surveyor or town planner can look this up for you at no cost – if you send me the address I’m happy to get the info for you
From here you can start applying for your planning and building permits. This is where you’ll need to go on the greater dandenong council website ( http://www.greaterdandenong.com/Documents.asp?ID=2323&Title=Forms ) and get all the necessary forms to fill out. I’m not sure if they have a checklist but again any surveyor can help you with what is required.
Then you can get a plan of subdivision drawn up and submitted to the titles office. This will be amended to suit the buildings that are on site, as brickies will never be millimeter perfect.
That’s pretty much it in a nutshell from the planning perspective of things. Of course if you have any questions feel free to ask!
Kindest Regards,
Ashley StaceyThere have been some fairly big changes to Greater Dandenongs planning policy and zoning recently. For example, they generally discourage double storey at the rear of the land now. So, you might not get approval for a development like on your neighbours property. Just something to be aware of. Best to give them a call and see what you can do.
To fit two townhouses you need at least 600+ m2 of land, most councils require minimum 900m2 block of land in order to be subdivided, unless you are in inner city area. But you better check this, if this is your intention.
There are heaps of rules and regulations out there, do your figures first, its a night mare.
Two townhouses will cost you 450k to build approx, will you get your money back?
Its always good to start with renovations, and than take it to next stage.
Generally there are no minimum block sizes (in Melbourne) and I have seen plenty of 2 unit developments on sites of less than 600sqm, including in Greater Dandenong. What the councils do is have differing requirements for setbacks, open space, site coverage etc which basically dictate how much development can go on the land. Greater Dandenong have three different residential area with differing restrictions so until it is know which area the block is in it is hard to know what is possible.
Once you have a development built or approved it is possible to get subdivision approved. However, without any development veseli is right, you would need 900-1000sqm.
Well I went on land.vic.gov and found out the zones for both it and the one across the road that has been developed on and they are both Residential Zone 1.
Also my idea was to tear down the existing house and build 2 3bdr town houses side by side, so they would be at the front of the block not one at the rear and one at the front.
Viseli when you say 450k do you mean just for the building or are you including all the subdivision, plans and permits etc costs?? 450k seams a little steep considering on just the buildings themselves!
Just construction costs, thats your average cost to build two townhouses approx 150m2 each
You keep on mentioning subdivision costs, but i think you will only be able to strata title them in order to sell them separately.
To subdivide the land is a complex, costly and time consuming job, and i think you cant do it on that block of land.Im a builder and i priced many of them, so trust me stick with those figures, they can cost you more but less.
Price may depend on many factors, but without me knowing any of them, thats your starting point.You have been given great advise from people in the know here so far.
Construction cost is around $10k per square for double, or around $7-8k per square for a single storey but that can change dramatically depending on what quality you're after and the type of contract as well. Turnkey would generally be higher cost but lower risk in terms of cost overriding the estimate/quote.
There's a lot of work to do if you decide to do it but keep asking.
Hi Reeeen,
How are you going with all this?
Some councils will let you subdivide on tiny blocks, such as Doveton which has a 200sqm minimum block size. But…… and its a big but, it depends on the block. Where are the easements if any? What overlays are there, if any? do you have any large trees that council may decide at a later date that they want you to keep? What is next door, either side and across the street? Is there a DEMAND from buyers to buy what you are proposing to build? Have you talked to at least 3 real estate agents and found out end sales prices and rental returns so you have a clear picture? What else is being built in the area? Have you talked to those builders and got a rough cost for what they are building there?
Call the council and ask them, Can I do this? They may say maybe, then call a couple of town planners or architects or draftsmen and ask, Can i do this? How much? How long?
Construction costs that were put in sound ok, I'd add another 50k for extras such as fences, landscaping, blinds, aircon things that are not included in the building contract.
You will need to subdivide to sell AND strata title to sell. The subdivision gives each property it's own physical parcel of land whereas the strata title shows on the actual title each parcel of land.
Also keep in mind your profit, it has to be worth it. Developing takes time 12/18 mths at a minimum to start and finish something like townhouses and if you walk away at break even or a small profit you need to ask yourself if it is even worth starting.
You need to ask as many questions as you can, developing is about more information rather than less. You can't say at the end…. Oh I didn't know that, because that will cost you a lot of money.
Good luck, developing is worth pursuing, but you need information.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeHi Reeeen,
Firstly, congratulations on having a go. It's much easier to say than do.
There's plenty of good advice available on this forum, but you need specific advice.I don't personally know Melanie, but she seems to be knowledgeable and pragmatic. I would suggest you seek a meeting with her, or another town planner, and get to the bottom of your own planning issues.
Prepare a list of questions, make a time, and get some answers.
As Melanie suggested, many subdivisions are done on lots of less than 600m2, and we deal with all different types of densities on all different types of land. Generally speaking, the closer the property is located to key amenities like transport, shops and employment, the higher the permissible density.
Thank you everyone for the valuable information!!
The vendor of the property wasn't willing to settle for the price I was offering so I am playing the waiting game now… plus I have also added another couple to my list that have blocks 600-700sqms.
Thank you DWolf they are all very good questions I am going to contact the agents and ask them these questions!!
womeninpropmelb does the information session cost anything to attend?
Also can anyone give me information on the process of selling "off the plan"?? can it be done easily?? is there any cost outlay needed for this??
Yes, you will get sooo much first hand information at the meeting!
Yes, you can sell off the plan- not much different in costs – but much harder to do- People are sketchy about what they do off the plan- most wont buy until they see the finished product, especially in a unit/dual occ type scenario.There are probably easier ways to do it. You get an agent – or not – and sell. And you transfer the title when its built.You will learn so much more on all of this at the meeting too.
See youUseful stuff as I am thinking of doing a similar thing on 2 adjoining blocks in southern Tasmania, The total area will be 1542 sqms. I have a silly Question that any one could answer, how many square meters in a square? i have been told many different things and need some clarification.
Also when you say 10 000 per square for double story or 7000 to 8000 to build a single story is that based on total floor area or the footprint of the building? is it more or less expensive to build floor area in to stories?I believe there are 9.29m2 to a square.
Generally it is less expensive to build out than up.Phew glad I rang the council before I did anything as the restriction here is the minimum block size this council will allow is 400sqms which is only 3 units and in this area at this time there is not enough margin in it to make it worth while, for the sake of 60sqms.
My RE is keen and is going to argue with the council however there are other opportunities without the hassle Im sure.Calling council or going there is a great thing to do. They are really helpful. What is your RE? I always say- take the shorter way home. If something looks like a reeeeally great deal- you need to ask why are plenty of others not jumping on this? Asking lots of questions is a good idea. I just love this forum!
Whilst it is prudent to approach the municipal planners to get their opinion on possible development opportunities, you must also remember they are not in the business of subdividing and development.
One should not necessarily be deterred by the opinion of the council if the proposal fits within the parameters of the planning provisions and other governing policies. The municipal planner will never advise that a proposal should be made if it is "pushing the envelope" as that advice could later bite them on the arse.
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