3 Townhouse Development City of Moreland

Discussion in 'Development' started by Phil Natoli, 2nd May, 2020.

Join Australia's most dynamic and respected property investment community
Tags:
  1. Phil Natoli

    Phil Natoli New Member

    Joined:
    2nd May, 2020
    Posts:
    3
    Location:
    Melbourne
    Hi Guys, I’m Phil.

    Some 10 odd years ago I purchased a house in the City of Moreland, land size is about 630 square meters. It’s a unique block in that it has a wide frontage (20.5 meters) and is about 30.5 meters deep.

    City of Moreland is in Melbourne.

    The house on it has been rented out and it’s getting quite run down and old. I have been toying with the idea of developing some townhouses on the land. Based on what I have seen around the local area, I reckon I could get 3 side by side townhouses each with its on street frontage and at least a single garage, if not bigger.

    I have zero experience in the development game, but I just feel like there is an opportunity to make money rather than sell the property and let someone else develop it.

    The property only cost me 425k and it’s worth at least double that at the moment. I’m think 3 nice townhouses (4 bedroom) would bring about 750-780k each going by comparable sales in the area.

    I guess the advantage I have is that I have had the property for sometime and the land has gone up considerably. I have laid out big money in order to buy the block. That’s why I see this as an opportunity.

    Wanted to get some expert thoughts on my situation and is it realistic that I will fit three townhouses on the property? What would the build costs be? And is it a project worth pursuing?

    Would appreciate any thoughts, ideas and suggestions in relation to it.

    Regards,

    Phil N
     
    Surfer, KingBendtner and Gforce like this.
  2. Hamish Blair

    Hamish Blair Well-Known Member

    Joined:
    29th Sep, 2015
    Posts:
    442
    Location:
    Melbourne
    Is this a corner block?

    Cost for 3 townhouses, say 200m2 each @ $1,750/m2 = $1.05m

    Remember to get legal and tax advice, specifically around the GST margin scheme and CGT.
     
  3. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    2,456
    Location:
    QLD
    Why not get the DA then sell it with the DA in place for a profit? Takes the risk out of developing then selling the properties, which is likely more difficult than you may be expecting, especially due to lack of experience completing a project like this, just a thought.
     
    Surfer likes this.
  4. Tufan Chakir

    Tufan Chakir Well-Known Member

    Joined:
    18th Aug, 2016
    Posts:
    619
    Location:
    Victoria, Australia
    If looking at 3 bedroom houses you will require two car spaces. If side by side (as in a double garage) each will be 6m wide. the whole of your frontage taken up with garaging. This won't be approved by the Council. You could look at single car garages and a second space in tandem - but consider the market especially if you're thinking of "nice" townhouses
    There are a number of issues that need consideration.
    Why not get some good, solid professional advice about what could reasonably be achieved. I suspect that three across the front may not work, for a variety of reasons
     
    Surfer and lixas4 like this.
  5. Phil Natoli

    Phil Natoli New Member

    Joined:
    2nd May, 2020
    Posts:
    3
    Location:
    Melbourne
    Hi all - thanks for the replies!

    No it’s not a corner block, just has a fairly wide frontage.

    DA? Does this mean Development Application?

    I was thinking single garage, and a second space in tandem.

    I have been keeping an eye on a recently completed development in City of Moonee Valley, whereby 3 townhouses (4br, single garage) have been built side by side on a very similar sized block as mine albeit slightly deeper.

    I am aware that it is a different council, but I like what they have achieved and given the blocks are a comparable size I have kept an eye on it. The market is very different In Moonee Valley, so they would be worth a lot more than if they were built in Moreland. I guess I would need to factor this in and not over do it with the build given the values would be considerably different. However the way they look and fit on the block is completely reasonable in my humble opinion.

    When you say seek professional advice, do you mean Town Planner? Or Builder? If so, any recommendations in that area?

    Really appreciate it.

    Phil
     
  6. Gforce

    Gforce Member

    Joined:
    4th Oct, 2019
    Posts:
    17
    Location:
    Oceania
    Hi Phil. City of moreland town planner might be a good start? Just to see what they'll approve? Good luck friend. You are in the box seat.
     
  7. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    2,456
    Location:
    QLD
    Development Approval
    Good luck to you
     
  8. Tufan Chakir

    Tufan Chakir Well-Known Member

    Joined:
    18th Aug, 2016
    Posts:
    619
    Location:
    Victoria, Australia
    Different Councils - different provisions - it will depend on neighbourhood character and the specific zone and zone schedule. ...
    Town Planner - definitely not builder. Make sure they are really a town planner (qualified and registered with the Planning Institute) and not just a drafter...
    Also there's often a provision that says something like "garaging/parking should not dominate the street frontage....and should not exceed 30% of the width of the frontage..."
     
  9. Phil Natoli

    Phil Natoli New Member

    Joined:
    2nd May, 2020
    Posts:
    3
    Location:
    Melbourne
    Hi all, quick update.
    Have since spoken to an architect with considerable experience in the area. He said we can pretty much rule out 3 side by side townhouses due to the council being strict on multiple driveways. Plus they have an open space levy on 3 or more which could be potentially very costly.

    His suggestion was 2 side by side dwellings of about 24 squares each. He said the council was fairly strict on double garages, but I would want to push to ensure each dwelling had a decent size double garage (who doesn’t love a big garage!). He’s going to do me up a schedule of fee and charges. Reckons it would take about 6 or so months to get a Planning Permit through.

    Also spoke to a builder mate. He advises would cost about 17k per square, plus fencing, driveways, landscaping etc. So roughly 820k to build, plus those costs.

    Based on my own research I would suggest they’d be worth about 850-875k each once completed.

    Thinking it would be best to speak to an account to assess if this is a worthy project. my aim would be to sell one, and live in the other to avoid CGT, then sell it a year or two later.
     
  10. Tufan Chakir

    Tufan Chakir Well-Known Member

    Joined:
    18th Aug, 2016
    Posts:
    619
    Location:
    Victoria, Australia
    Also - don't let the architect unit on their own - get a specialist town planner involved...at least, that's what I'd recommend