Building dual occupancy one dwelling at a time

Discussion in 'Development' started by JLC, 20th Aug, 2021.

Join Australia's most dynamic and respected property investment community
  1. JLC

    JLC Well-Known Member

    Joined:
    2nd Jan, 2021
    Posts:
    96
    Location:
    Aust
    Is it possible to get council approval for a concurrent dual occ/subdivision with capacity for two Torrens title dwellings to be built one at a time? Would look to have one finished and certified before using equity and cashflow from rent of first build to service second build. I understand this would be more expensive but it might allow to hold both properties rather than have to do pre sales. Is this allowed or because council approved them together in the DA, they also have to be certified together. Have left a message with local council but they are taking forever to respond - thought someone on here might have the answer a bit faster...
     
  2. Colin Rice

    Colin Rice Mortgage Broker Business Member

    Joined:
    9th Jul, 2015
    Posts:
    3,183
    Location:
    Perth
    If the land is titled first then yes you can build on one title and the other title at a later date or sell as H&L package or vacant land or just sit on the land indefinitley, hope I read it how you meant it as wasn't super clear?
     
    JLC likes this.
  3. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    4,982
    Location:
    QLD/Australia Wide
    Are you building dual occ or two separate dwellings? My understanding of Dual Occ (limited) is that they share the same roof, and share a common wall - therefore would need to be built at the same time...
    If two separate dwellings no common walls or roof you could build one at a time.
    From a lending point of view, you would not need to wait until the first one is finished to use the rental income towards serviceability for the second build.
     
    JLC and Simon Moore like this.
  4. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    4,982
    Location:
    QLD/Australia Wide
  5. Tufan Chakir

    Tufan Chakir Well-Known Member

    Joined:
    18th Aug, 2016
    Posts:
    872
    Location:
    Victoria, Australia
    In Vic - yes
     
  6. JLC

    JLC Well-Known Member

    Joined:
    2nd Jan, 2021
    Posts:
    96
    Location:
    Aust
    Thanks for the replies everyone. I heard back from council after I posted this and they advised that it's fine to rent out after first one is complete to improve servicing for second build but they won't provide the subdivision certification until after both builds are completed. Valuation for financing lending is obviously impacted until the subdivision is completed. Selling one half without completing both developments would not be an option, according to council.

    The dual occs in this case wouldn't be duplexes sharing a wall but two separate dwellings - sorry if my first post wasn't clear.
    Thanks again.
     
  7. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    4,982
    Location:
    QLD/Australia Wide
    Just FYI - Dual Occ is not the same as Duplex and Duplex is not the same as freestanding buildings.
    The reason I felt the need to clarify is you will have very different responses from Finance perspective if you're calling the builds Duplex's or Dual Occ etc.
    If you're financing the builds the lender will complete an 'as if complete' valuation for you prior to providing you finance, on these valuations they will have a rental estimate that can be used towards serviceability calculations - ie. you do not need to wait until one is finished and tenanted before using the rental income for serviceability.
    Are you sure there's no way you can subdivide before building?
    What state is this in?
    Is this your first project of this kind?
     
  8. Westminster

    Westminster Tigress at Tiger Developments Business Member

    Joined:
    3rd Jun, 2015
    Posts:
    11,331
    Location:
    Perth
    Are you in Victoria? Victorians seem to use the word dual occ differently to every other state and use it to refer to 2 houses on one parent block that can have separate titles (before or after construction).
    In all other states dual occ refers to 2 houses on one title that can't be subdivided and often is attached.
     
  9. tedjamvor

    tedjamvor Well-Known Member

    Joined:
    22nd Oct, 2019
    Posts:
    218
    Location:
    Melbourne
    That whole story just doesn't add up. The house behind is also a Duplex.

    Depends where you are and how it's done. I've seen it been done in Geelong West before

    2015
    upload_2021-8-23_12-1-8.png

    2016
    upload_2021-8-23_12-1-46.png

    There's about 5 of these in a row, all been done one year at a time. Here's the end of the block in 2020
    upload_2021-8-23_12-2-52.png

    Still one more to build.
     
  10. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    4,982
    Location:
    QLD/Australia Wide
    Why's it taking so long?
     
  11. JLC

    JLC Well-Known Member

    Joined:
    2nd Jan, 2021
    Posts:
    96
    Location:
    Aust
    Hi Westinster. This is what I'm working towards... Screenshot_20210823-220250.png
    This is a large block, retaining front property and subdividing rear into two 200m blocks for subdivision. They will need to be lodged as dual occupancy and subdivision at the same time, is my understanding. Some councils allow this, others don't, to the best of my knowledge....
     
  12. Archaon

    Archaon Well-Known Member

    Joined:
    20th Mar, 2017
    Posts:
    1,896
    Location:
    Newcastle
    You need to speak to a town planner.

    In Maitland council I was able to obtain a subdivision for 327m2 by suppling plans for the lot, and then burdening the new title with a caveat called a Section 88b instrument which meant that only those house plans are able to be built on the land.
    This allowed me to use the completed value of the land and build to fund the build as I owned the land outright I used the equity to make to fund the build with no out of pocket capital.
     
    Last edited: 23rd Aug, 2021
  13. tedjamvor

    tedjamvor Well-Known Member

    Joined:
    22nd Oct, 2019
    Posts:
    218
    Location:
    Melbourne
    For any number of reasons, I don't know who's doing the project, just been driving past it since the new woolies got put in out the back.

    Maybe it's a builder-developer, maybe it's about loan serviceability, maybe it's self funded. All I know is that at least in Victoria, what OP is asking is possible.
     
  14. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    4,982
    Location:
    QLD/Australia Wide
    news to me, I've done finance for dual occ's down there and they definitely had shared walls
    But OP is building two separate dwellings not Dual Occ/duplex/townhouse.
    No project should take that long either so I must assume it's self funded because generally if financed you just do them all in one go and lender wants pretty defined timeframe around the builds
     
  15. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,319
    Location:
    Sydney
    Council have rules around this and much of its actual things like title... You cant build half a title eg half a duplex as if it unfinished its a concern... Lenders also wont touch a part completed site. But you can get a DA to do "stages" but this must consider site access and impact of constructon and risks. Side by side can be more success but then you may also miss the sequential cost benefits of doing "all in a row". Front / rear are harder especially if there is a driveway and a reversing truck hazard could kill a resident. One near me was approved for 63 villas and t/houses. They then had to get DA approval to stage it into four. Council refused four as the fourth would have had danger for residents and no parking for trades. So it became three. Council upped the bond too as they had concern the public space damage (footpaths, splays and road etc) may be enhanced. The council contribution also went up a bit in total with more front ended. And catch is they cant fence the road off and it became a public road. Council did that within days.

    Here is one that caught a buyer.
    ‘A mess’: Builders explain house disaster
     

Buy Property Interstate WITHOUT Dropping $15k On Buyers Agents Each Time! Helping People Achieve PASSIVE INCOME Using Our Unique Data-Driven System, So You Can Confidently Buy Top 5% Growth & Cashflow Property, Anywhere In Australia