Hi all,
I have been searching the forums for a couple of weeks now, and can’t seem to find the answers im looking for… Hopefully some of you can help.
I’m looking for some advice on accurate costs when it comes to doing a feasibility assessment, to determine whether a development is worth proceeding with. I am currently looking at purchasing a property for the development of either 2 or 3 single storey units. I plan to knock down the existing property.
Some of the costs i am considering when determining the feasibility of the project are:
1. Purchase Price
2. Building Costs
3. Holding Costs
4. Stamp Duty
5. Demolition Costs
6. Plans and Subdivision Costs
7. Agent Selling Fees
8. Tax
9. Sale PriceI understand the need to be conservative when doing calculations, but i feel i need to determine reasonably accurate figures in order to increase my accuracy with determining profit, and to some degree, risk.
I am currently allowing $10K per square (living) for the build, to get them built through a builder. From what i understand, this is reasonable for a mid-range quality finish…. I am having difficulty when it comes to working out what the holding costs would be over approximately 24 months for the project from start to finish, as obviously the construction loan would only be fully drawn down on once the build was finished.
I am also looking for a cost on the subdivision process, subdividing into either 2 or 3 lots. Can anyone advise what the cost would be to get a company to undertake this process for me, although i am also considering taking on this job myself if it would save me a considerable amount of money.
I am allowing $10,000 for the demolition. Does anyone know if this is accurate?
Any other advice / things to consider would be greatly appreciated. I am looking at doing this development in Melbourne.
Thanks in advance!!
Rob
Hi Rob,
There’s another thread here about townhouse development in Melbourne, which I’m sure will be of use to you!
https://www.propertyinvesting.com/forums/property-investing/help-needed/4343719
I can give you some help with your subdivision questions though. In my experience the difference between doing the subdivision yourself and paying someone for the entire package is the lodgement of plans to obtain the permits. First is you going down to council yourself, the other is them sending it off for you – you’re essentially paying someone a lot of money to save a small amount of time!
There is a significant difference in costs between the two so I would recommend to you (and everyone else on the forum) is to do as much as you can yourself. Surveyors will manage the subdivision process for you and undertake everything in the correct order etc anyway so you won’t have to worry about that.
Subdivisions are essentially a two-step process, first you’ll have to have the initial site survey done which is used for subdivision design as well as application for a planning/development permit. Following this the subdivision is drawn, a Title Re-Establishment survey is undertaken and lodgement is made to the necessary offices. If you see my website there is a flowchart available for download on the front page which applies to 2 and 3 lot subdivisions in Melbourne. http://www.staceysurveying.com.au/
Depending on the size of the prospective blocks, you might need to have plans for the new dwellings lodged with the permit application. For a straight subdivision for two separate titles (without dwellings designed), as a rule of thumb you will need 250-300sq.m in a “rectangle” shape in the backyard. Here’s the recommended fees from the Surveyors Board for subdivision- which is what those large ‘package deal’ companies charge. http://www.mediafire.com/i/?msti7q5x3asp6nd (click “download image” at the bottom).
We stick to around 60% of these to give you an idea of how much savings are on offer if you do a couple of things yourself (Not to advertise! Just giving an idea of the differences).
Cheers,
Hi Rob123,For peace of mind employ the best QS you can afford
Hi Rob123,For peace of mind employ the best QS you can affordYou must be logged in to reply to this topic. If you don't have an account, you can register here.
