Hi all I am trying to work out the $$ feasibility of doing a duplex on my current PPOR, rather than sell as is and let someone else do the development. it meets the rules for a R2 with size and width of block, no easements,although a sewer line runs across the back fence, but well away from the building area, block has a slight slope to rear, but hard to pick by eye. 1. Project home (Metricon, Lilly Ect) or 2. Recommended builder (Recommended by 2 real estate agents) Here are my items and rough Calcs based on some research here and speaking to others. Construction Cost $ 620,000.00 (426sqm x $1458) (4br 2bath single garage) Town Planning $ 10,000.00 Demolition $ 28,000.00 DA $20,000.00 Council Section 94 $10,000.00 Water Board $ 7,500.00 Council Subdivision $ 10,000.00 Water Dentension Tanks $ 25,000.00 Landscaping $ 16,000.00 Rent while building $ 60,000.00 (60 Weeks x $1000) Holding Cost of Loan % $ 69,510.00 Agents Fees for sale $ 25,600.00 Contingency $ 40,000.00 Hyd Eng Plan and Work $10,000.00 Total Cost $ 951,610.00 Have i factor in everything, Not sure what the builder (Project Homes) include in their prices waiting to hear back from them Does the DA include, (Town Planning, Section 94) Is my contingency enough? Hyd Engineer as our block has a slight fall front to rear? Have to get a Survey done, any recommendation Parra area of Sydney I bought the block 8yrs ago and have been living in it as our PPOR ever since
10k for hydraulic engineering plans seems a bit expensive for a duplex. How much do other developers pay for this service in Sydney?
We based it as we thought if we have to move we would move closer to my wifes work in Leichhardt and rent is between $800 - $1100 (Fivedock - Concord) and rather over estimate the time than under estimate. we have 3 kids a boat and two cars to move, so it has to have a few things. All the other figures such as the Hyd Engineer plans and work required to meet the plan are me guessing and reading other post, the only thing i have from a project builder is the base price of the duplex and a list of optional items.
The hyd estimate is drastically over estimated we can do them for around $1500-3000 depending on the site and constraints.
My costings were pretty close as I over estimated most areas, but the excess I over estimated was going to be consumed by the easement needed through my rear neighbour, So once I had all of my quotes in I was at $912,000, So $950,000 was probably going to be the finished product.
Hi, can you elaborate on the easement issue and how much it would have costed you? Also are you at liberty to say what kind of block in what suburb it was now that you've sold it? Thanks mate, all this helps me out a great deal.
HI The block was in Parra Council area, Telopea / Oatlands, Parra council do not let you have above ground detention tanks or mechanical pumps to pump the stormwater to the street. so with my yard falling 950mm over 50mtrs to the rear I had to go through the rear neighbour to get to the street. Their block had a fall of about 2500mm from rear to front. My block size was 823sqm and had a 16.9mtr frontage For the Easement 1. I had to pay for access rights which from memory was about $20,000 based on a estimate of how much land we would affect 2. Drilling under my neighbours yard was way cheaper than digging it up and replacing plants, shed and pond. It was like $4,000 including pushing the pipe through and pit in the front yard. GPS location to pinpoint the easement to make sure it was right on the fence line and include hitting lots of Rock. 3. Both Neighbours refused and both had Solicitors on speed dial, so when they signed the form to say No, they also included a line about, for further request please address our solicitor and added his contact details. 4. Cost of the excavation and tanks, I didn't price up but friends said allow $15,000
That is all very interesting, thank you so much for sharing. Glad it worked out for you in the end mate.
You can the take it to court, which according to Metricon and Clarendon homes as long as you have exhausted all other options, offered a fair $$ rate and cover all cost it’s highly likely you should win the right to get the easement.
How does one calculate fair value for an easement? Council rateable land value? but you're not buying the land, so would it be a %? Usually what's the form of the easement? 900mm from side boundary, along entire lot to the street? I've been strictly buying property on the high side of the street because I couldn't get my head around getting the easement.
1. Independent valuer values the land and you pay a % of the affect land so my case was 1000mm x 53mtrs give or take. The way they look at it is the land is affected by the easement so it reduces its value as it cannot be built on. So for me it was $$ 1. Legal fees to fightas they didn’t want it 2. Land rights for purchase for easement 3. Cost of easement 4. Title change cost to register easement 6. In ground detention tank, designed around sewer that ran left to right at the back of my property. 7. Hydraulic design to get the Stormwater to tank and out to easement. 8. Valuer cost Some people have less drama and the rear / Side neighbour do a deal and you save $& just depends on the neighbours.
Thank you - sounds like your steps 1-8 is the worst case scenario then. Do you mind sharing how much that all cost?
Another thing to keep in mind for anyone else in a similar scenario is that once the after tax cash in hand is considered when you compare selling your PPOR CGT free Vs developing it to sell, taking the financial risk and then paying the fees to sell plus taxes, the margins end ip often being not worth the hassle
Correct plus the build time and stress involved, when Mr developer came knocking it was pretty much a no brainer, my figures had me about $50 / $70k better of developing than taking the sale, but we all know that one hiccup and that could have been wiped out. Especially working full time and juggling 3 kids.
