twiggymcgParticipant@twiggymcgJoin Date: 2014Post Count: 2
First Time poster. Im in my late 20’s and wanting to start getting into subdvision to manufacture some equity.. I only have a general idea of the process and thought of engaging a ‘full service’ subdivision company to hold my hand through the process. I have gotten a referral to consider Property Subdivision Corporation Aust Pty Ltd (159 Dorcas St South Melbourne) who has uses them previously. I have been told they give an excellent service and very experienced but I’m put off by $24K ‘Property Locater’ fee; basically this is for finding a suitable site in a suburb of interest that they ‘guarantee’ can be subdivided otherwise they will refund your money. This is compelling but seems quite pricey- is it worth it to not have to do months of searching/ potential failed feaso’s/ peace of mind?? This is on top of approx. 50k for full architect plans & permits and approx. 20k services and connections and 350k dwelling construction costs.. How does this compare to other full service subdivision companies? Has anyone got any positive (or negative) experiences with other companies out there in victoria?
Appreciate your feedbackCanberraClaireParticipant@canberraclaireJoin Date: 2005Post Count: 47
Welcome to the forums twiggymcg.
That does seem high, and may take up some of your profits. It depends how much, and how willing are you to share that profit for the experience?
I don’t know the company but I’d suggest looking around at other service providers who can also put you in the right direction. If you can find a buyers agent down there with investing experience, they can find you a place that meets your requirements and a good one will know what local developers are paying for them. (Don’t want to sound biased as I’m a buyers agent but there are licencing requirements if you’re buying property for people, so do be aware of that). Their fees may be a lot less than 24k, although many do charge 1-2% of purchase price. On top of buying at the right price they should be able to put you in touch with other experienced professionals (eg surveyor, planner, architect) who have been there, done that, and are happy to help.
The trick with getting a helping hand to start you off, is being clear about who’s getting the best deal. Newcomers can be easy targets for a big margin for businesses. The parties who are doing it for you will certainly have their own network of professionals who they want to work with, but check who they are and if you want to work with them down the track. If you’re planning on repeating the process it’s worth building relationships to help you in future. Are their service fees higher than what you’d pay if you were a regular customer? Sometimes these close relationships have kickbacks all over the place, and you don’t get the best outcome. And is the main provider you’re signed up with happy to have you by their side at every stage, or do they prefer interstate or time-poor investors who are more hands-off?
Speak to council and see if you can sharpen up your numbers, they can give you accurate costs and explain the process. Subdivs are mainly about paper shuffling, up to construction stage anyway if you are doing a build as well, so you’ll be dealing a lot with your surveyor/planner primarily. Council will also be able to give you a hand with the “subdivisability” of a block, free of charge. If you can find out from council which DAs have been for subdivisions, check out who’s drawn up those plans and follow up with the architect for more leads. Sometimes the best way to learn is by getting your hands dirty, rather than having someone hand it to you on a plate. If you’re intending to do more developing, personally I’d lean more in favour of spending time with councils and seeing the portfolios of subdivisions done by experienced surveyors and town planners. It’s not wasted time, it’s building a strong foundation to keep moving forward time and again.
I’d prefer to retain control and deal personally with all the service providers myself. Choose wisely and you’ll find they have enough experience to guide you in the right direction as part of their job description, no extra fee required.Jamie MooreParticipant@jamie-mJoin Date: 2010Post Count: 5,069
I’m put off by $24K ‘Property Locater’ fee
Whoa! I would be too!
I don’t know the company and have no idea what they offer – but that sort of price tag is massive.
Jamieoc1Participant@oc1Join Date: 2012Post Count: 148
There’s one thing you can’t have and that is a guarantee when it comes to town planning permits. You would probably need to under-develop the site to assure? a positive outcome. Even then there are many variables out of your control.twiggymcgParticipant@twiggymcgJoin Date: 2014Post Count: 2
Thanks for your feedback- all very helpful. CanberraCalire thanks for your expansive reply, seems first thing i should be doing is getting onto the council to get a better idea of costs, process and general requirements of suitable properties. Then I can move ahead with a sharper idea when looking for suitable sites. Planning to start small- live in original house whilst adding single dwelling in back. By scaling up should learn plenty along the way and hopefully not have too many expensive lessons ;)
Thanks Jamie-definitely cooled on the idea as cant swallow i’d get 24k value out of it. And thanks oc1 – you make an excellent point as no guarantees in process.
Definitely glad found a forum of like minded individuals willing to give out pointers to a newbie.