Dandenong Development

Hi Guys,

Looking for some helpful advice/tips. I have an investment property in Dandenong North on a 650sqm block.

I can build two townhouses. One at the front and one at the rear. Unfortunately I cannot do duplex style as there are townhouses next door, will cause shadow issues.

My thoughts at the moment with construction cost soaring is this project is even worth it?

Here are the conservative figures;

Purchase cost: 480k
Planning/building permits: 60k
Build cost: 700k
Extra cost (demo, nbn etc): 60k

Total costs: 1.3mil

Looking through the market, 3 bedroom townhouses in Dandenong North I could sell the front townhouse for 750k, and the rear for 600k.

Total sales: 1.35mil

Am I missing something here? Doing the maths, all this risk and hard work for 50k profit?

My property is currently worth 700k, purchase price of 480k. So without even doing anything I’m sitting on 220k equity.

Thanks guys, any help/advice will be appreciated.

 

hi shaun

i think you over estimated the construction cost by at least 100k. possibly 150k

you can build a nice property for 250 as long as you make the right decision.

i would say construction cost 575k + 120+ 480 = 1.17m

sell for 600 + 750 = 1.350 = 180k

based on my experience i think theres an easy 200k here as long as you make the right decisions and speak to the right people

good luck

 

Thanks Baz. Great advice.

 

Seems to me you are better off using the equity for a different project if the original house needs to be demolished.

 

Consider talking to a professional town planner who knows what they are doing & are able to guide you with setting the right expectation for your consideration