Hello all, This is my first time on the forum. I'm hopeing that I can get some advice regarding my situation. I live on a corner block. The home is weatherboard and approximately 60 years old. It has been renovated on the inside in the past 6 years. The outside needs a good decent paint. I have a home loan of $160k. I'm in two minds as to pull the house down and build 3 units. 1 to live in and 2 to rent. Or to subdivide and build 1 unit at the back to live in, and rent the house. I have no idea of the costs involved. I would have to borrow. My only concern is that because of my age (54) that I may have problems getting a loan. Looking forward to your suggestions.
Hi,
Welcome to the forum, we hope you find it useful here!
For financial queries there’s plenty of people on here who can help out, I can recommend Aaron_C off the top of my head.
The first questions I’d be asking though with subdivisions is the feasibility of the project. Eg. Where is it located? How much area have you got to work with? Are there any overlays? What is the zoning etc.?
There’s a couple of town planners on here who can provide detailed feasibility studies on developments at a nominal cost. As a surveyor I can give a simple idea of the feasibility and council fees involved, although am pretty useless when it comes to building costs!
Cheers,
Hi FTI
Welcome to the forum and hope you enjoy your time with us.
Certainly your age is not an issue as long as we can show sufficient serviceability.
I have had a 20 Year term approved this morning for a 60 year old but they had sufficient superannuation to take them past 65 and did not have to rely on selling their PPOR in order to cover the loan repayments.
One issue might be 3 units on a single title however i have a couple of lenders who wont have an issue with this so subject to everything else you would be ok. Might be possible to subdivide the land prior to constructing but this will depend on the local council.
Where possible i would try and retain the existing house as otherwise you will be borrowing against land value only and that might be harder than it looks.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi FTI,
Have to agree with Stacey Surveying – need more Info – there are a few options that you might consider depending on what you can put on the site. Perhaps doing a 2 staged development and A Joint Venture with another Investor are a couple of ideas that spring to mind. You could also look at building 3 – selling one and keeping 2 if you can't manage the loan.
As for building costs I work on $1100 per sq metre to start plus development costs. So a 200 square mtr unit would be $220k to build as an initial guide.
Age isn’t an issue as long as you argue it properly. As for subdivision, you need to study your numbers properly and talk to Council at the very least.
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