AureusParticipant@aureusJoin Date: 2010Post Count: 3
I'll be moving to South Australia from overseas where I am planning to either purchase a house on a land of around 700 to 750sqm or just land around the same size. It cost around $400 000. I have a couple of ideas in my mind.
1) If house and land are bought together,
live in the house, subdivide and sell the land.
2) If only land is purchased,
subdivide, build 2 courtyard houses, live in one and sell the other.
I have some questions.
I have been reading on these a bit and I'm overwhelmed. I would like to make a small profit on the sale so that I can use it to pay some of my loan.
When I subdivide, do I have to also factor in the cost for sewage, storm drain etc? How much does it cost roughly? I read on a forum that it could be around $6000.
How much does it cost to build courtyard houses including everything needed to sell the house? I saw a few developers website but I only saw AV Jennings with some quotes which sounded too good to be true. I doubt I can build with just $130 000.
Do I need to contribute to GST for the sale? What other things must I factor in besides council fees and surveyors fees?
When the property is valued, how much more on top of the valuation price can one sell?
Thank you for taking the time to answer.christianbParticipant@christianbJoin Date: 2009Post Count: 386
It's a big commitment but what you are proposing is not unreasonable. You need a strategy and a plan (although it seems you are pretty close) before you can answer the questions in detail, however, here is some food for thought:
- An investor who is looking to develop for the first time shouldn't take too much risk, so a margin of 20% is a sound goal.
- A professional investor/developer will be looking at a 30%+ margin.
- Both of these should be considered in the context of the cash/cash return. If you tip in 30% cash/equity, and a financier (let's say the bank) tips in 70%, then your margin of 20% equals a CC return of 67%.
In my opinion the costs to subdivide will exceed $6,000, and the build costs will be in the $1,200 – $1,500/m2 range.
Good luck with the project.wealth4life.comMember@wealth4life.comJoin Date: 2003Post Count: 1,256
What about doing a search on court yard homes and granny flats ?????
First thing to do is down load the LEP on what u r thinking to do.
Good luck.Ol PaintingMember@ol-paintingJoin Date: 2003Post Count: 123
The cost of subdivision depend on few factors and be quite different depending on type of your subdicision (eg. free title, community title, common water meter, etc)
The best way is to set us an initial meeting with a local town planer.
It will cost you about $100-150.
Give them addresses of your prospective buys – they will tell you what you can do there and how much you should allow for a subdivision. You will also hear hips of very useful information – money very much worth spent!
You must be logged in to reply to this topic.