This question keeps confusing me. Without having had experience, how do I go about getting even a rough estimate of the cost of construction on a project? For example one I'm considering atm would be to build 4 townhouses on a block. If I had drawings/etc I could approach a builder and ask for an estimate, but I dont expect I'd get much if I just asked for ballpark on 4 townhouses without drawings. On the other hand, it seems like a fair expence to pay for drawings before even putting in an offer on the block. On yet a third hand, it seems like a bad idea to put in an offer without having an estimate of costs. I presume those in the game for a while have a fair idea about these things in their areas, but whats the best way foward for a first timer?
I'm wondering if you can put in an offer which includes some kind of 'subject to feasibility' clause or something?
I dunno, any suggestions? How did those of you who have done development before start out in this stuff?
If you are after a cost of construction only and the Townhouses (assume they are 2 storey) are fairly basic then you could quiet easily work on say $1200 per square metre depending on what is being included.
Dont forget over and above this you have landscaping, driveways etc
Other issue maybe financing it if you havent done one before.
4 Titles on the 1 block is not every lenders cup of tea and on the basis you wont have any pre-sales you are going to be limited to what you can borrow against the site.
Richard Taylor | Australia's leading private lender
Thanks Richard, gives me a starting point, I can also run numbers for 3 instead of 4.
– Ben
No worries Ben.
Richard Taylor | Australia's leading private lender
Hi, this is what I did. The Yellow Pages & street directory are the most hardworking tools in my house.
I jotted down the addresses of the major builders. Then I went to their offices. All of them had salespeople whom I could make appointments to talk with.
Most imptly, all of them have brochures, some thick books with pictures. I asked for a price list and most major builders were obliging enough to give me one.
Then I made copies of my topo survey plan & superimposed the designs I liked.
Had lots of fun dreaming about the lovely houses I could build. They ended up not bad for the price I paid.
Have fun,
KY
My two cents – start small. As with everything, learn to walk before you run.
Take on a small extension reno (buy a 3 bed with a good land size, and ad a bed / ensuite / living space). This will give you a very good idea on construction + fitout costs.
From here, you will learn some of the tools of the trade, and if you're very lucky, will form a relationship with a good builder (trust me, if you find a good one, latch on for all you're worth!)
Hope this helps.
I keep thinking thats a good idea, then get distracted by bigger deals :p
Haha – I understand completely. But you're playing with big sums of money, so it's best to start with a solid base of knowledge.
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