Forum Replies Created
Are you talking about about services once you are inside your own boundary?
How many townhouses?
For electricity – Powerline companies can do scoping, where look at your property and number of dwellings being built and determine if you need upgrades to transformers etc or if its ok. Power inside the boundry seek quotes from electricians.
Water – usually statutory water charges but now it depends on if your doing community titled or torrens (green) titled home. As obviously the latter is going to be more expensive.
Local state water authority will do things like sewer and mains extensions (this should always be part of your due diligence to determine that mains and sewer run past the development beforehand or factor in this cost).. Plumbers take can of internal so seek quotes based on plans from them. Coordination with electricians is essential here can run pipes in same trench at different heights. Cost saving
Telephone. Telstra will connect to the pole. Networks and most electricians can do data wiring as well.
its hard to give specific prices because more detail is required.
surveyors can give you the community title statutory water fees, land division and any Open space fund contributions needed
Simple way to work out if they are charging you alot of money
– tradies charge by the hour
– accountants charge per block of time
– lawyers charge you per minute.
Who makes the most money lol.
That's the problem with paying by the hour. No incentive to finish work promptly. I had a lawyer who kept me on the phone once talking about something completely non related "his plans for the weekend" and then billed me for a additional 6 minutes of his time.
Your not getting royally shafted. Just most likely the very top of the scale and a bit of ignorance that has been taken advantage of.
Ill be honest.
If that took me one whole day to get all the materials and i mean one whole day 8 hours. And then the next day i started work.
I've finished more then that in 8 hours.
The guy was not working on your house for those jobs for a whole week.
This is something that everyone learns the hard way. Get a quote first, then agree. At least your bill was only 2k. I had to learn mine on a 4 k ("it should cost you this much sir) which then doubled to 8k on the invoice. Always get something in writing first even if its just a email or a text message with the price and list of works to complete. You just cannot take people by their word anymore. I commented before about property managers even getting kick backs from 'property maintenance handy mans". It does happen.
Did you get a quote for the works. If not pay the bill to the handyman direct and sack your PM.
Or go back through your rental agreement and see if you have a limit to how much your PM can authorize without telling you. ie standard is around $350-500. Im assuming he rang you up and just said theres some issues that need fixing. If he didn't ring you up and just went ahead without telling you, you'd prob have a case.
Usually most residential contracts have a built in 14 day extension period. Where you can request a extension and they charge you default interest usually at 10 percent. This is if its the banks fault and them being slow and you haven't just applied 2 days before settlement. IF the bank do take a while to organize your loan, you can request them to give you some payment back for the period. This payment might be say to waive your application fee or waiving your annual package fee.
Screen doors are relatively cheap and good for security i think if you can get them during construction where you can have standard sizes put it then its ok. (plus some people like to leave their doors open to get airflow through the house.
Blinds and curtains – If your reselling the homes i would say don't include them, the majority of people are going to install what they want themselves. I.e. You installing a base model curtain or blind its most likely getting ripped off anyway. If its a rental property i would install them. But i would only install base model curtains/blinds, Unless it was a upper price spec home then i would choose a better quality.
I think with development. A lot of those features whilst individually don't make a big difference and might not increase the value more then cost (ie the cost of ducted air conditioning is most likely just going to add that in value) But people expect air conditioning these days in a new home. So eventually if your competing against a property that has remote control carport, air con, security screens vs someone that hasn't included them. They get the sale and you don't. At the same time you don't want to go over the top and put the best air conditioning system in. perhaps just the mid range. Or choose a cheaper brand that has a great warranty. You might save 1000's of dollars going the cheaper version and the buyers or Tennant still get the benefits that if it breaks down it gets fixed for free. Went a bit off topic there.
No not really. It's depends if your renting them say as serviced apartments. Or independent single bed units.
I know a couple other guys who include them but they are building sets of 10-12 single bed for student accom.
Its like a fridge. You would expect tenants to bring their own fridge. You just have to provide the plumbing and waste pipes
Ring the LTO before you order one. Because it can take 3-4 weeks for the change in name on the title to occur. Don't want to end up with the old owners name on it still.
They only cost around 250-270 extra to add. I would
I think when it comes down to bigger unit developments. If your building to hold them and your Servicablity can afford that, then what presales are you going to need? (None) provided you meet the LVR requirements. I'm about to start building 7 townhouses in a couple months. That's all residential lending at 80 %. At worse they would go to a 70 % GRV loan for the 7 units. And then convert them all to 80 % individual loans at the end of the project.
Oc1, did you consider Commbank, they do residential lending up to 4 units on site before switching to commercial.
Im not a registered builder yet, Im currently doing my minimum technical requirements course which is a cert 4 in building and construction so i can go for my licence hopefully at the start of next year. Currently Ive got a building supervisor who works for a fixed fee per development.
With building contracts
The two most common are either
Fixed price or cost plus.Some states don’t allow cost plus. Ie I don’t think Queensland do.
The advantages for the owner for a fixed price bill.
– they know the price from the start and can budget.
– any extra costs are incurred by the builder (but usually things like hitting rocks when doing footings are priced into the building contract so they wouldn’t pay, owner would have to)
– banks like fixed price contracts a little bit more then cost plus
– but usually the builder puts a fudge factor into his quotes because he doesn’t want to pay more if he goes over. So your quotes reflect this added risk for the builder.– cost plus contracts (cost plus labour)
Can come with fixed fees ie you pay 50k to the builder,
Or you pay a percentage on top of costs to the builder ie you pay their margin. Ie 15% plus the cost of materials.
– owners worry about these contracts as they don’t see it as a incentive for the builder to keep costs down, with wastage and hiring more expensive tradies.
Because if the costs go up the builder still makes his margin.– cost plus with fixed fee and fixed maximum price.
this is my personal preference for a couple for reasons
– you know the cost your paying the builder for his service.
– you get the advantage if materials are cheaper that saving gets passed on to you.
– usually you get the builders trade discount. If you have a good builder they will pass this on.
Ie if they have deals with truss companies or boral, masters etc. can save 5-10% on costs just by having there discounts passed through to you.
– you also have a maximum price. This keeps the incentive on the builder to look around for a couple quotes on jobs instead of accepting the first one. This works like hedging your bet. You get the
Benefits of getting a cheaper price in cost plus. But also minimize your risk.Also if the builder is supplying the contract is have a lawyer look over it first. Because it most defiantly will be worded to favor the builder.
Just double check.There's a short course your can do over a weekend with some training organizations. Called building contracts. Over a weekend they run through the specifics about
fixed price ccontracts
cost plus with % fee
cost plus with fixed fee
cost plus with fixed or % with capped maximum price
Be careful that you get things like stormwater drainage, paving or cement paths around the externals, window blinds if required, gardening and irrigation, rainwater tank installed included or at least get quotes for those things if your not going to put them in a single contract.
Most bigger building companies. Always list their prices from 100k for example. But they miss out the 50k of extras that you actually need to have a turn key solution. Your not going to be on site putting in stormwater drains (which are essential for maintaining the integrity of the footings).
I like NRAS but not at the 1 home mum and dad investor level. I think NRAS for a builder or developer, can be a great tool, (IF you can drag yourself to answer the 17 page application document, Its huge). I mean imagine your building 4 homes on a single site and if you were to keep them it would cost you 20k a year over the whole site.. Naturally you would sell a few to pay back the debt and have positive cash flow on the remaining homes. But NRAS increases your cashflow by 40k per annum making it possible to keep all the dwellings for a cashflow of 20k positive per year. You also get increases in rent above the CPI i think last year was 4.5 % built in. You can choose to take the federal governments 7k ish payment as either a tax offset or as a cash payment (State goverment pays roughly 3k as a cash payment) . For people earning high incomes this is a bonus.
You can have 2 of the homes taking the cash payment and 2 of the homes taking the tax offset. Pretty much earning money without paying any tax at all.
Plus you've got to keep 4 assets over keeping just 1 or 2
Hi Oscar
What's the block dimensions looks like over 1400 sqm ?
How did you buy the site, on the market or off the market?
What were some of your negotiating strategies to get your long settlement?
Planning to sell 3 keep 1 ?
Thought i would continue on from your developing 101 post. Good information for people to read.
cheers wilko
Id be weary accepting the advice of your PM about building structures. He's a property manager not a builder, take his advice with a grain of salt and seek a professional builders opinion. I do know of several PM's that get kickbacks and favors from builders for passing them along work. Yes that does happen. I know one who got his whole outdoor undercover entertainment area built for free for the amount of maintenance issues he gave to one particular company.
Mining or satellite town?
I i went through the stage of renovating properties. About half the properties I used for quick turn quick cash. In, Reno in 6 weeks, out, sell. And the other half where renovation subdivisions. Where you are not trying to make 50 k from just doing a straight renovation. You would be doing a land division as well. The renovation is just to maintain as much value as you can in the original house.
I think the biggest thing that renovating house and subdividing homes has taught me is that I can now see value, I can see money. I can look at a home and pretty much know if its worth investigating more. Learning to read specific parts of council development plans, understanding what you can do. Looking at other subdivided homes and going "how did they subdivide that corner block when the minimum block size needed is 350sqm and their block was 270sqm. How did they do that ? Turns out the answer was they had a firewall between the two homes and built on the boundary, they also built a 2 bed with study(eh eh 3rd bed) and therefore only needed one carpark.
Buying privately instead off a agent is another way to get those "sites" that nobody thinks are out there. Yes it does involve getting up and dropping letters in all those corner sites. I found that having a business card and a typed signed letter work well. You want people that open your letter to fully believe that if they wanted tto sell you'd be there the next day with a offer for them. Also with negotiating privately, always let them suggest the first price. It might be lower then you though and if there's profit it at that price, negotiate the best conditions you can get. A 6 month settlement with access to the backyard is worth sooo much more more then just 10k lower on price.
After going from that typical renovation, subdivision you end up at property development.
i would say though in the current market not everywhere but generally. If i had a decent income.. Above 75k with minimal debt and some savings or equity. I would not be out renovating (individually and on a single home)
in terms of mentors I started with a mate who was out there renovating and subdividing, Learnt the basics and then when i progressed past him I went out looking for new mentors to guide me. This meant people that had done and still doing developments, asking to spend a day with them, absorbing their knowledge, visiting their past sites. I think think these experiences whilst they don't give you all the answers give you confidence.
My current single development for this financial year has a net equity gain of 350-400k, with a positive cashflow result of just under 50k per year. But getting there has involved a couple years of what I call my "apprenticeship years" you work like a dog long hours, your pay is never as high as you expect and you make plenty of mistakes that cost you money.
Some other things I learnt that are important.
– there's no use talking to the bank teller about finance, speak to someone who is recommended that has done the property deals before, or you'll just waste time explaining.
– pick your development based on your income and what you can afford.
– 95 % of properties on the market that are "subdividable" won't make money. They have already added on the value of the land to the un-subdivided house.
– work out your team, first!
– arrange meetings with various people you will need along the way. All accountants lawyers, surveyors , builders will sit down with you (most likely for free) and learn a bit off each one. You might not use all of the people, but your trying to find people that you get along with, so that you can ask the "stupid " questions.
What are they like with trust distributions. I know some lenders don't really understand when you give a spouse, family member income through a trust. Are they able to look at the trusts income. Instead of your personal tax. Or is it easier if you pay a little bit extra tax, have all income into your own tax return because they might have difficulty with looking at all the trusts distributions as your own. (Which is a contradictory, as any income you give yourself is discretionary in nature anyway)
Only 80 % LVR needed.
Looked at some low doc loans. But why got low doc when I already have full documation.
