All Topics / Value Adding / Subdivision costs, please?

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  • Profile photo of kay henrykay henry
    Member
    @kay-henry
    Join Date: 2003
    Post Count: 2,737

    Peter and other developers :)

    Is it possible for you to provide me with a ballpark figure of costs to subdivide residential land – for example, over one acre into 4 X 1/4 acres blocks.

    I am assuming there might be different costs for different states, but is it more or less standardised across Australia?

    I’m not thinking at the moment about whether it’s possible re council approval etc… more interested in the cost of it.

    Thanks in advance :)

    kay henry

    Profile photo of lisabellanlisabellan
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    @lisabellan
    Join Date: 2004
    Post Count: 48

    Hi Kay,
    I’m so pleased to be able to add something after learning so much from your experience.
    I’m unsure of the acre into quarters, however I recently subdivided a 1012sqm into two. The associated costs were: $1200 to have a surveyor do his thing (measuring block, drawing up plans) and submit the plans. $5335 to the Water Corp towards the future water service to the area ie pipes etc down the street were placed to service xx amount of houses and now there is one more property. If there are another 50 added, for example, they may need to do a major upgrade. This is how the cost was explained to me.[blink] Add to that the actual plumbing costs ($800) of adding the new sewer junction/situating the pipes to the new block – The minister sewer was down a back ‘right of way’ so had to be piped through the existing property (additional sewer junction) to the start of the new block. I had to pay to have the overhead electricity placed underground ($750 for the dome), as new subdivisions in WA aren’t allowed to continue on the old overhead system. The existing house is on the back of the property so I had to have the gas ($600), electricity ($800) and water pipes/reticulation relocated down the new driveway along the fenceline as they ran down the middle of the property to the front. Settlement agency fees ($250) to arrange new titles and $150 to the bank to release the original title. I budgeted for $10,000 subdivision costs and was not far off. I hope that the above assists you and others when costing out the necessary expenses. The transfer/approvals/titling and building of the new house whilst the subdividing was going on on the property is another story for another time…… [cigar]

    Profile photo of Mortgage HunterMortgage Hunter
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    @mortgage-hunter
    Join Date: 2003
    Post Count: 3,781

    Lisa,

    That is a very detailed break down and would be of interest to lots of members.

    I would love to hear the rest of the story of the project when you get the time [biggrin]

    All the best,

    Simon Macks
    Mortgage Broker
    http://www.mortgagehunter.com.au
    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of kay henrykay henry
    Member
    @kay-henry
    Join Date: 2003
    Post Count: 2,737

    Lisa :))

    Thanks so much! As Simon said, it’s a hugely valuable reply and indeed will be useful to others- and very much useful to me :)) I’m really grateful to you.

    Ya know, I’ve just had this idea of “the one big deal”… that instead of going for the 10%, 20%, 30% CG here and there… that if one did “one big deal”, that it could fix it all up, pay off the debts, and be on easy street to do further deals down the line.

    Lisa, I really like your profile, too- I hope you “multiply by contribution” about your own experiences, so that we can learn from you (3 posts from you just ain’t enough!) [cap]

    kay henry

    Profile photo of MTRMTR
    Participant
    @marisa
    Join Date: 2004
    Post Count: 663

    Hi Lisa, thanks for that info currently looking at same. Would you be able to advise on what cost unit/house would be and kind of property, ie 3×2 or whatever.

    I am also from Perth, and curious about development area?? if possible Cheers[biggrin]

    Profile photo of lisabellanlisabellan
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    @lisabellan
    Join Date: 2004
    Post Count: 48

    Hi, As there was an existing house on the back of the block I was restricted in sizes etc. The back block is about 580sqm which includes the driveway down the side and the battleaxe area for the turnaround. Mine in the front is 490sqm. I have built a 210sqm beautiful 4×2 and have a backyard of about 4 metres which runs right along the back. its a shame we can’t add attachments or I could show you the layout of the land. The land can actually be divided three times, my area is going green title in the next twelve months, but as the back house is staying and I was building for myself I am happy with the two. I have remembered a bit more about costs since I wrote the above so you should budget more for around $15,000 to cover fencing, crossover and driveway of existing property. Im pasting all of my stuff about the subdivision onto a word doc which once finished should be quite comprehensive on the start to finish.
    Good Luck, what area are you looking at and is there dwellings on it already or starting from scratch? Dependant on those things will be where your next move may be.
    this is a copy of what I posted in another forum tonight:
    I started by getting the plan from the local council and found out the local rules about sizes and zoning, then contacted a surveyor to look over the plans and come out and measure up. He will be able to give you a plan that can be submitted for approval and depending on what sort of subdivision you are doing, (there are a few different types survey strata vs building strata) and will be how you make the next decision.

    Profile photo of chefmanchefman
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    @chefman
    Join Date: 2003
    Post Count: 61

    [biggrin]great subject and great info from all!!!!!!! We are also in the middle of a subdivsion of 10 acres into 1/2 acre blocks and it has been a great learning experience. Lots of work but the end result so worthwhile! yes Kay this our big deal and do you reckon the better half love’s it!![suave] Once project completed wife can then retire. very cool.[chef2]

    Profile photo of DuLunchmanDuLunchman
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    @dulunchman
    Join Date: 2004
    Post Count: 1

    Yes I agree with all the previous posts…. Well done Lisa, very informative. This is my first post as I only joined earlier today, (So bear with me). I have been saving madly for my first house (I live in S.A.) My plan is to find something that is subdividable and either sell the block or build and then sell the new premises, therefore reducing my debt allowing me to have a base{home} and collateral to go again. – All depending on finance. I have contacted the councils and relevant dept’s and as Lisa has said in her 2nd post 15000.00 is a very good base to allow for. No point in not being able to finish for lack of funds.

    Well done Lisa….

    Mat :) [cap]

    DuLunchman

    Knowledge, Optimism and Action !!!

    Profile photo of PepperPepper
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    @pepper
    Join Date: 2004
    Post Count: 48

    Hi Lisa,

    Thanx for the post!!!! I wont be subdiving at this stage of property investing but if I ever decide to I’ll refer back to your post which I have copied into my VIP (very important proerty) info file!!! [biggrin]

    Pepper

    Profile photo of everdineeverdine
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    @everdine
    Join Date: 2003
    Post Count: 119

    [happy3] Ditto

    Thanks for a great post, & lots of helpful info.

    Hope it all goes better than your expectations!!

    Diane

    Profile photo of taffytaffy
    Member
    @taffy
    Join Date: 2003
    Post Count: 9

    hi all
    just completed a sub-division in perth last year
    summit projects did the feasability study($330).
    it was detailed enough for the banks liking.
    built 2 3x2s of a good standard for approx 240k[cap]

    Profile photo of kpkp
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    @kp
    Join Date: 2004
    Post Count: 509

    HiTaf,
    Can you expand on the various costs.
    Eg…subdivision costs ( strata or green title) Demolition if reqd. Fencing and landscaping.
    And finally, how did this stack up to new market value ( did your equity position improve after completion comapred to before you started ??)
    Just curious as I completed one last year as well, and currently have one on the go in Ardross.

    Cheers,
    KP

    Profile photo of AUSPROPAUSPROP
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    @ausprop
    Join Date: 2003
    Post Count: 953

    sometimes these numbers appear rosier than they are… sold a subdivided block for a developer earlier in the year. He bought it for $300k and i sold rear block for him at $152k (record price at the time) and front house for $205k. he had stamp duty $12k going in, subdivision say $15k, agent fees $14k, interest and legals around $10k, conveyancing costs. one of these numbers must be slightly out as i think he made about $5k all up before tax. waste of time for the headaches and risk involved.



    Extensive list of ‘Off The Plan’ property available for sale in Perth.

    John – 0419 198 856

    Profile photo of PeterCombenPeterComben
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    @petercomben
    Join Date: 2002
    Post Count: 16

    Hey Lisa, do you want to come and help me run a workshop??? Ha ha [tongue]

    No seriously… your detailed information will really help those who are considering subdividing land and need to know what the breakdown of costs looks like.

    Peter.

    Peter Comben
    http://www.smartpropertydevelopment.com.au

    Profile photo of kpkp
    Member
    @kp
    Join Date: 2004
    Post Count: 509

    Hi John,
    Why go to all that trouble for such a poor return ??
    Also why not go ahead and build on the rear block before selling it ?
    Was he forced to sell, hence the poor result ?

    KP

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