Hi there, my husband and I are looking to purchase a property in Melbourne north east with the plan of putting 3 townhouses on it. Having never done anything like this before I am not too sure what I need to find out before we bid at auction. I have contacted the council and size wise the property is large enough to accommodate 3 townhouses. I have seen the section 32 and there are no easements or trees that we will have problems with. If anyone has any words of advice as to what homework I need to do I would be super grateful!
Cheers SimoneheleneNo expert here but check with the Council that a 3 townhouse development is likely to be approved, i.e. strata or Torrens title (or what that's called in Vic). Do the sums on the development costs vs. likely sales costs to establish an estimated profit for the development (work on at least 20% profit after all development costs). Are you able to rent the existing property while seeking Development Approval, which may take up to 12 months? Make sure that you have an appropriate tax structure in place, e.g company or trust. Is there a soils test available for the property or can you determine an expected soil profile from a soils map of the area, to see what effect it may have on footing design for the townhouses. Check any other town house developments in the area as a guide to standard of construction and finishes.
Thanks so much Trev, you've given me some great things to start working on. The property does have a house that can be rented while we wait for permits. Would you know if the council would have a soil map of the area? Thanks heaps!
Hi Simonehelene,
Some great advice from Trev there.
Ultimately, having a plan is the most useful thing you can do.
There are professionals out there that can help with all of the elements that need to come together for a successful development, but you – as the developer – need to have the plan and the will to carry it out.
In the first instance you need to assess whether the property can be legally and practically developed as you propose. And, of course, be done profitably.
Some really rough rule of thumb to get you started:
A) Assume a density of 1:300m2. This won't always play out, but it will usually.
Assume build costs of $1,500/m2. This is a good starter and will provide a reasonable level of finish.
C) Assume a further 10% on top of this for infrastructure.Put these together, and you have enough information to know if you should further the research.
Happy hunting.
Assume build costs of $1,500/m2. This is a good starter and will provide a reasonable level of finish.You must be logged in to reply to this topic. If you don't have an account, you can register here.
