I have a property in regional area. It is about 1571 sq m. There is house there in the middle of the block.
I am thinking to develop units. Council have given green signal at this stage. Now, I need to do cost analysis.
Problem 1
No builders would give be the estimates without I have plan ready. I have approach surveyors etc, they said it will cost me about $4000 because we need to do the soil test etc….DO I HAVE TO DO PAY FOR THIS TO GET THE BUILDING COST?Problem 2
There are no units in that town and so it is hard to get the idea of how much I can sell it for. What technique I should use to find out how much can I sell it for?Please help.
Thank you in advance.
Viral
Hi Viral,
I can’t imagine a builder giving a price without some plans to quote from. However, these do not neccessarily have to be professionally drawn up plans. Ask the builders if you draw up a rough idea of what you want, if they can can give a ball-park figure. However if you want a “real” quote you will need professional drawings, perhaps engineering drawings and a soil test is important as well.
It sounds as if you are in a remote area if there are no other units in the town. This may add to the cost of building as tradesmen will have to travel from other areas, material deliveries may cost extra as well.
Perhaps you can speak to local real estate agents to ascertain whether there is a demand for units where you plan to build, they may be able to estimate a selling range as well.
Good luck,
Sue“Be careful not to step on the flowers when you’re reaching for the stars”
Originally posted by viralk:Problem 1
No builders would give be the estimates without I have plan ready. I have approach surveyors etc, they said it will cost me about $4000 because we need to do the soil test etc….DO I HAVE TO DO PAY FOR THIS TO GET THE BUILDING COST?Yes and no. It depends on how accurate you want your costings to be. If you don’t get the pro’s to check out the piece of land properly, you may find that the units you have designed are not suited to the piece of land for structural or environmental reasons.
So you can get an estimate from a builder by explaining what you have in mind, but it will not be a proper quote (which is their official offer, that is a legal document if you go ahead with their service).
Equally, you need to discuss fittings and materials with the builders so they can be specific with their quote. Saying ‘x many lights’ is not the same as saying ‘x many Brand B, Model C lights” as there are huge differences in costs by brand and model. And depending on the structural implications of the ground, you may be required to use a specific material for footings that is more costly than other options.
As for unit price – tricky one. Are there any nearby towns that have units? Perhaps if you compare the % price of an x bedroom unit to the x bedroom houses in nearby towns, and then apply the same ratio to your own town it will work?
So if in a nearby town a 2 bedroom unit costs $60,000 vs 2 bedroom houses that cost $120,000 that’s a ratio of 50%. If in your own town 2 bedroom houses cost $140,000, then price your units at $70,000.
This is just an idea – I have never tried it. And the end of the day it will only ever be worth as much as people are willing to pay.
HI,
Is it possible that if there are no units at all in the town that there is no demand for them. Just something to consider before spending your cash?
Good Luck
Don Nicolussi | Mortgage Broker - Home Loan Warehouse
http://homeloanwarehouse.com.au
Email Me | Phone Me"I think of finance as a technology, a way of getting things done." Robert Shiller
G’Day,
You need to get soil tests done as this will determine the class slab you may require, or if it has to be stumped or you may even need pilons. These can all add a substantial amount to the overall costs so i recommend you get one done.
the test can cost between $500-1000 roughly.Also once you have a soil test you can then get proper plans drawn up. Having a guesstimated quote is no help as they may say $100k per unit but once soil test and proper construction plans are drawn it could blow out to $250k per unit.
good luckLLLOCCO
Fundamentally you are asking the wrong questions. Does ayone want to buy what you propose to build?Does anyone want to rent what you build? Does the income generated from what you build exceed the cost to build? This market research is the first step. If the answer to all of these questions is yes, with a 30% buffer to the third question then investigate obtaining town planning and building approval to construct whatever you are proposing.The cost of town planning / building approval is various however I have recently achieved this in Northern Tasmania for less than $20,000 re the construction of 7 x 2 bedroom villas.
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