Evening all…
I have found a (great) in my eyes, property to purchase. Couple of things I am not sure of though.
The site is just under 800m2 which is big enough to develop for the council it is in, plans have been drawn up for two townhouses (front and back) and it is currently going through council and is at advertising stage…(according to the agent)
Q- Is there any way I can check this all out (with council etc) to make sure it is all allowed to happen on this land? I have copies of all of the plans drawn up in 2003. Is there any wording to put in my offer that should be included? I.e- subject to xyz…
The current house is asbestos, which will be expensive to remove (any idea how much for a standard 3 bed home and sepearte garage?) -Does this affect the development in any way? I.e doe the site have to be cleaned up after the asbestos removal or any thing I havent considered?
Considering all of this, the house is in pretty average (ok its falling to bits) but the price is at or even slightly below land value for the area… This will be my first development site and long term (when I can afford to finance the development) it will be a good buy.
Does anyone with a little more experience have any suggestions?? This will be my 4th property, however I still dont know nearly enough!
Thanks heaps!
Dev [cap]
Dev
Care should be exersiced. The council may approve the development but may put conditions that may make developing the property unviable.
There are many such traps when considering a development. Therefore it is importand to consult with a professional advisor who can help you explore all the scenarios.
The next step is to conduct a preliminary feasibility study to determine if the development is going to be viable. Some of the factors that you have to conside here are things like cost of operational works, council fees and charges, constructions costs, house removal costs, etc. This initial feasibility also determines what price you can comfortably pay for the site.
If the site stacks up you can then make an offer subject to due diligence and townplanning advise to buyers satisfaction.
I look at around 10 to 12 development sites each week and 90% fail the preliminary test. A further 50% fail the due diligence test once the property is under contract.
Remember with a development site your profits are made at the time of purchase therefore this is a critical phase. So take care.
Regards
Sailesh
http://www.developersedge.com.au130073 5934
Dev
Sailesh has given you good advice.
In which state is your property.
In Victoria most old houses have asbestos in them. In teh eaves or in cladding. An average old house with asbestos to demolish and clear the site could cost $8,000
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auMichael
Thanks for your reply, I was hoping to get to your seminar last weekend but was interstate for work!
The property is in Victoria, and from the prices I have been quoted today 8k is about spot on.
I have the plans that are going through council at the moment, but will need to get the owner to pay for the copyright so I can use them if I purchase the property. I dont want to rush into it, but I would like to make sure I know everything I need to, and every deal is different! [blush2]
Thanks for your comments…
Dev [cap]
Originally posted by devilcv8:Michael
Thanks for your reply, I was hoping to get to your seminar last weekend but was interstate for work!
The property is in Victoria, and from the prices I have been quoted today 8k is about spot on.
I have the plans that are going through council at the moment, but will need to get the owner to pay for the copyright so I can use them if I purchase the property. I dont want to rush into it, but I would like to make sure I know everything I need to, and every deal is different! [blush2]
Thanks for your comments…
Dev [cap]
Dev
It’s a pity you didn’t make it last Saturday. There were over 400 people there and I believe they learned a lot.
The plans go with the property and not the owner, so if you buy the property and the plans go through council succesfully and a developemnt approval is achieved, you would also get the plans.
Yes there are clauses you may need to put in a contract. Not the sort of advice to give in this forum but you can call me on 9532 8889 and I may be able to help.
Of course you are paying a premium for the land if the previous owner has obtained the permits. Have you considered doing this yourself?
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auDev
You also have to consider the suitability of the development based on the dempgraphic demand.
One of the key factors of a successful development is ensuring the development is appropriate. Therefore careful research is required before plans are drawn.
Architects and developers are known to come up with expensive and inappropriate designs.
Now that the investors have left the market you need to ensure your construction will appeal to the owner occupier.
As Michael says, if you start from scratch you mak be able to acquire a cheaper site and get to build a sustainable development.
Regards
Sailesh
http://www.developersedge.com.au
130073 5934
Would it be uncommon to make an offer on a property based on the DA being approved with council within xx days?
Dev [cap]
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