Hello,
I am looking to expand my IP portfolio into subdivision / building untis or townhouses / selling upon completion.
i have found a good suburb in Melbournes outer sth Eastern suburbs which ticks all the boxes.
i received a very rough quote from a builder which is below..
'To demolish whats there and build 2 townhouses.
– 3 bedrooms, 2 bathrooms, Living areas, kitchen – outdoor section, finished landscaping, all required driveways and crossovers
– All finishes to be from basic, standard builders range
– Builder to look after job from start to finish
– Not including plans, permits etc.
You'd be looking at spending around the $650,000 mark which would get you both houses built and finished – if done simultaneously. You could definitely get the costs down if you personally contracted out the demo and landscaping. If you found a cheap volume builder (cheap – sometimes questionable quality) you could possibly get the costs down to around $600,000 or a touch under.'
Purchase price of existing property with house still standing will be between $275-305,000.
i know the above are all rough figures, although can anyone confirm if these values are close to spot on the mark to build something with a medium quality finish to sell ASAP?
appreciate all assistance,
Thanks
Hi EdmundSt,
the price of building new dwellings really is more accurate when you work on a per square metre rate. How big are the units or townhouses you are planning to build? Are they brick or timber, are they single or double storey? Do you have tile or colourbond roof etc? All these things can make a massive difference to your calculations.
The demo is also subjective to the dwelling you wish to demolish. Is there any asbestos involved? It's easy to make a few phone calls to demolition companies, they can give you ballpark figures.
Do you know what all your plans and permits are going to cost? Do you know what your sales prices will be, if you are planning to sell? I wouldn't go out of your way to seek out a super cheap builder, it will reflect in the finished product. You get what you pay for.
You'll be surprised how much info you can obtain from local tradies when you supply them with the info required for an accurate quote.
Good luck!
I'm subdividing a block of land and building a 4 bedroom house on each lot in North west Sydney, turn key cost is $460,000 each so $920,000 for both and this is discounted already as im building them both at the same time. Medium – High quality finish.
– 4 bedroom
– 2 levels
– 2 Bathroom
– 310 sq meter living space
– Project builder.
I had 4 quotes previously, some were cheaper around $700,000 for both ( $350,000 each) but quality was not as good + smaller design.
You have to make sure your building the right type of property for the market/area your in….north western Sydney the houses are worth >$1m hence why i need a good quality finish and larger size and design so that i can sell for 1.3-1.4M each.
If i had this block of land in Western Sydney ( average house price is ~$500,000) than i def wouldn't be spending more than $300,000 to build.
How much do you expect to make from the project? ( ROR) and what's the average price for a new property in that area?
Your base price for each house is around $477,000 ( $305 + 650/2)
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
the block is 692m2. Current rough plans are to build 2x ~340m2 townhouses. After already speaking to the town planner, the front townhouse will be approved for double story 3BR. Back town house is only single story and will be 2-3BR.
Have spoken to council and calculated all plans and permit costings.
New 3BR townhouses in the area are selling between $360-410k. Existing property currently for sale is worth between $280-290k
Thanks for the heads up
Umm am i missing something….the numbers doesn't stack up, well the profits anyway.
Purchase cost: $280,000-
Stamp duty + softcost: $10,000-
Build cost: $650,000-
Subtotal Basic base cost: $940,000-
Selling new 3BR townhouses = $410,000+ each x2 = $820,000???
I haven't even included;
– interest ( holding cost)
– Marketing and selling cost
– Capital gain tax
– Professional fee
– Landscaping cost
etc…
Am i missing something???
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
This is correct. The main purpose of my original post was to confirm whether the estimation on building cost i received via email was close to the mark. I have done the same maths and more as you have pointed out and wanted to confirm if I am wasting my energy…
Ohh ok got it
Yea looks like your wasting your time if that's the building cost and "market selling price".
Min 20% return for any development IMHO
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
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