I am a newbie to this forum and desperately seeking some help around my current situation.
To keep it concise:
IP locates in the Eastern Suburb of Melbourne and sits on a 750sqm regular block. Existing 3br brick veneer house with rental about 350pw.I am planning to subdivide the IP , sell the current home and move to the subdivided TH as well as renting out the other one. I am struggling to make decisions between:
1. Renovate the current house and build a double-storey TH at the back (20-25sq). The reason I have to renovate is that I would like to move into this one while the construction of the TH at the backyard undergoing. After it is build, move to the new one and rent the renovated one out.
2. Demolish the current house and build two double-storey THs(20-25sq each in my mind) . Moving into one of the new TH and rent the other out.
Concerns with option 1:
• Given the current house needs to do a major renovation (Kitchen, bath, floors etc) , I m not optimistic about the cost associated with this , anyone could shed some light on this?
• The other issue with this option is that I will lose the current car shed at the backyard and potentially needs to build a carport for the front house together with the new construction.
• High maintenance for a quite old house. I have been contacted to repair the old pipes and deal with all sorts of issues with the aging houses.
• It might be a cheaper option in terms of budget wise for now, looking into longer term, It does not have much depreciation value given it s a 50 years+ house and by the time I want to sell later (not in short time) ,comparing the second option, which one would attract more interest?
Concerns with option 2:
• High capital to be invested on . The cost of plan, permits, demolish the current house and construction will be massive..is it worthwhile to acquire given I m on a tide budget ?
• Higher rental (the similar TH around this area with 4br/2/2 is roughly rented around 450-550pw) and deprecation tax wise
• Would this option attract more interest in the long time run? I m planning to hold it for at least 10 years.
While I m typing this, I feel like that there are heaps of things I need to worry about…..clueless…would really appreciate someone could help with this..
Thanks a lot in advance!
Hi Buttercc,
It sounds like you're feeling a bit overwhelmed with the options presented in subdivision. In all developments the key is to look at all options in detail to work out the best possible solution for you.
I'd very much recommend having a Property Development Assessment undertaken by our colleagues at Pillar & Post http://pillarandpost.com.au/ to look at all the scenarios, numbers and feasibility. From here an informed decision on the direction of development can be made.
Also, I have some information packages on subdivision which I'm more than happy to email out if you'd like. Please feel free to ask if you have any questions, as myself and the other professionals on the forums are always happy to help.
Regards,
Thanks very much for your reply Ashley…I have been reading your post about "Getting your development off the ground" however the doc is no longer avaliable…could you please kindly send to me (i have PMed you my email address)..Really appreciated!!
Buttercc, which suburb is the block? At 750m2 you can build anywhere up to 4 dwellings quite comfortably, but, it depends on the suburb.
Also, keeping the house and building out the back can work or you may find starting from scratch is better. Then again you may be able to retain the front house and build 2 rather than 1 in the rear.
Ashley's advice is sound….have a professional look at the finer details and numbers for you.
Cheers Oscar
hi Oscar, thanks for your reply!
This property is at Doncaster East,land size is approximately 17m*44m with existing house sits in the front half of the land… i have rarely seen ppl putting 4 dwellings around the area…generally two double storey THs..and the council has fairly strict rules for subdivision..By talking to the council earlier, they require 9 meters from the front of the house to the street which takes out fair bit of the space ..not saying min 40 sqm open space for each dwelling on the lot not including the common area..
Do you have any experience about this suburb and council previously? Would really appreciate someone like you and Ashley can share your professional thoughts here….
Hi buttercc,
The guys are right, you could build lots of things, depending on what suburb, zoning, overlays etc.
Can you give us a hint on the suburb? And I'd definitely say give Pillar and Post a ring and have a chat. The other even you can go to in June is Rookie Developers D-Day, Troy Harris runs a day course on developing and crams as much info as he can in. Email – [email protected] for more details, it's worth going to some of these things if you haven't developed before, you may meet some like minded people, make some contacts etc, and it's in the Eastern suburbs.
With regard to the long term, you may be 'planning' on holding it for 10 years but what if this doesn't work out for you? With development and renovation you need to make sure you make a profit (or worst case break even), even if you had to sell tomorrow. If you develop and in 2 years time need to sell for a life emergency or for any reason, then you need to make sure you can get out with a healthy amount of money in your pocket.
Let us know how you go,
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeHi Buttercc
Ahhh Doncaster East. I live in that neck of the woods so know it pretty well and have done a few town planning permit applications there.
You are correct, that size block will be suited for a 2 townhouse site. Manningham Council is quite reasonable i have found. Your setback of 9m is really worst case scenario. Take the average of the two neighbouring properties, measure their setback (not the portico) and take an average. That's the way you'd work it out. If it's over 9m then 9m is your setback by default.
Building one out the back can be possible if the land permits. Hard to comment without more info.
Cheers Oscar
Hi DWolfe..
Thanks very much for your advice! i will definitely check out with P+P..as well as the Rookie Developer you mentioned..it seems like new starters like me definitely need some brainstorming and mentoring sessions from the ppl who have been there,done that and made the profit out of it!! thanks a lot for sharing this info!!
And yes, i understand your point about life emergency that;s why i m trying to be conservative on the budget and the cost…i think i need to reconsider my ultimate goal here to make the priority clear!! again thanks very much for your kindly suggestion!!
:d
Hi Oscar
Do you mind to have a look on my site if i PM my address??By talking to the council earlier,,it is possible to build at the back,,it s just i m yet to make decision between my original two options…and the COST of course!!
Thanks in advance!
No problem at all. Shoot it through.
Cheers Oscar
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