Hi all,
Have done a search for information but no joy.
I have a PPOR in an area which is zoned for units. At the moment there is quite a bit of new construction going on, and a number of knock-down and rebuild for units.
I also recently saw a property for sale, around 1200 m2 that consists of two houses back to back with two street frontage, for around $1million. Which has given me a bit of inspiration.
I am considering approaching my neighbor to see if they would be interested in listing both of our houses for sale together, to a developer aiming to build 8-12 units (not sure how many council would allow as I have not spoken to them yet.). At say 75k per unit, that would convert to a sale price of between 600-825k. The lower end of that being not worth while at all, and the top end being very worth while. Given that our land size combined would be over 1600m2, it’s zoning, and the fact that smaller properties are listed for much higher price I think it’s not unrealistic.
Initially I can’t think of any ‘risk’ in this, except for advertising and marketing costs. But i’m open to anyone’s feedback on this.
Obviously it would be a better prospect for a developer if we already had DA for the maximum number of units, so I’ll be open to feedback from anyone who has got DA for similar sized projects on cost and requirements.
Given that the properties are in two different names, would there be any issues with transferring the titles?
Any foreseeable problems with this strategy??
Sounds like a fine plan the only thing you’d need to do is sell the properties together. Which means there will be two contracts and each contract will be conditional on each one being sold.
Cool, thanks for the feedback!
Will definitely have to get a solicitor to handle contracts then.
any potential problems for the buyer on that??? I mean if they are dependent on finance than would there be issues with valuation as the properties independently would likely not be worth as much…
The valuation is not your problem. But generally speaking two properties combined into a development site will be valued as a commercial prospect, which will attract a higher valuation if the feasibility is good.
No idea on planning myself, just throwing out options…
Could you combine titles, get the approval for rezoning etc then advertise the lot as a package deal.
You would get the higher valuation as it is now ready for development.
Benefit of this would be you could both still live in PPOR whilst all this is going on…Thanks Aaron, that gives me a bit of confidence to dig a little deeper.
I suppose another thing in our favor is that the properties, along with house on my other side were previously approved for 16 units a few years back.
Thanks menunes for your feedback also, initially I think we would want to keep it pretty simple. I can see higher risk if we don’t find a buyer, if we combine the titles and have to pay a bunch of fees. Though I suppose we can look into it if that becomes a roadblock.
If it can be avoided initially, I would prefer not to fork out for DA or any other fees not associated with selling. Particularly as I’ll likely sweeten the pot for my neighbor by covering that myself. Bit of a “I’ll take care of everything, just sign here” kind of deal. No-one likes moving, but everyone likes to make money!
Hi Grimnar.
I sold a unit together with a neighbour, and it went like a hot cake. We agreed on one agent, prices, split ratio, costs split, no ads for the first 2 weeks, time frames on market and opt out periods. REA marketed it to his hotlist and it was deposited the next week because these opportunities are scarce. Try to find another similar one in your area, then make sure you price it at a premium.
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
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