Duplex - Penrith Council

Discussion in 'Development' started by Hayley Cannon, 7th Jun, 2020.

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  1. Hayley Cannon

    Hayley Cannon Well-Known Member

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    Has anyone built a duplex in penrith council and can provide their experiences?

    Also any tips for the planning stage that may save money in the long run!

    Thanks!
     
  2. skater

    skater Well-Known Member

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    Nope! BUT, are looking at a duplex, that remains a duplex, or another smaller home on the same block, then splitting it later? There’s an Agent that’s done this with around 20 homes in St Clair. He’s got another on the go now.
     
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  3. Hayley Cannon

    Hayley Cannon Well-Known Member

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    Definitely a Duplex, there isn't enough land to split it into 2 blocks/torrens title according to the council guidelines.

    Let me know where the one in St Clair is happening and I will give it a drive by
     
  4. skater

    skater Well-Known Member

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    Melville rd
     
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  5. SteakOnThePlate

    SteakOnThePlate Member

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    Have you thought about waiting until next month and developing under the Medium Density Code? I've had an attached duplex built on an existing property in Penrith and whilst that experience was fine, I have found them slow and difficult to deal with (particularly R3).
     
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  6. Hayley Cannon

    Hayley Cannon Well-Known Member

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    Yes, I was reading about the code last year and noticed Penrith had pushed it back 12 months.

    I won't be starting in the next month or 2 just wanting to plan ahead and be prepared on costs etc.
     
  7. SteakOnThePlate

    SteakOnThePlate Member

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    You can see what issues people are having by reading recently determined da's. e.g. look for dual occupancies on Penrith DA tracker Terms and Conditions
     
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  8. gach2

    gach2 Well-Known Member

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    Ive done dual occs in Penrith council

    Few things
    1) Hows your skills in interpreting legislation etc (I do this for a living - not property/development related) but this assists me in not using a town planner - but if not best to use one

    2) Ive been following the council and they are going anti development lately. They used to be quiet reasonable to variations in DCP and LEP (within reason) but lately noticed they are rejecting on minor issues - so make sure your proposal is compliant

    3) Town planners on duty at the council are useless (don't know how to read their own legislation). If using a town planner just lodge the DA, don't bother with pre lodgement meeting (they complicate the proposal)

    SEPP 3B might be in place in July (but who knows - its already been differed twice). There is no real big benefit except rear setbacks and the standardised controls. You may find council easier. Also Penrith aren't too bad in timeliness so there isnt much savings.

    Do you have a vacant land? Knockdown rebuild in Penrith council aren't generally profitable
     
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  9. Hayley Cannon

    Hayley Cannon Well-Known Member

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    Thanks for all the info!

    I do follow legislation in my profession so i might have a deeper look at potentially bypassing a town planner.

    We bought an older home in St Mary's South in 2018 for $505,000 on 696sqm - current tenant is paying $380/week however the plan was always knock down and rebuild. Making money on this would be great (who doesn't like making money lol) but long term the goal was to have 2 local-ish properties near our family home for my 2 older children (10 and 9) to have once they are older. My oldest does have special needs so wanted to safeguard their future without just giving them money as such
     
  10. gach2

    gach2 Well-Known Member

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    Without even going into the process I would do the feasibility

    505k for that property in that location sounds like a great deal (then again I do not know the property so it may have its own flaws). I would use current market value though when doing feasibility

    Might be better to look into what you want to build and how much it will cost you.

    If the house is falling apart and needs work and you were planning to rebuild then a knockdown rebuild of a duplex may work out.

    Generally this type of project doesn't really stack up in Penrith Council. The agent that @skater was talking about if it is the same person I am thinking of generally doesn't knockdown rebuild hence their profitability
     
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  11. skater

    skater Well-Known Member

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    Correct, he keeps the original home, gives it a makeover & sells it.
     
  12. The_Billy

    The_Billy Well-Known Member

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    - I would first talk to your financier and see if it is possible in your situation. You are look at the following range - ($30k design and DA) ($40k for Contributions and CC) (Demo & Construction $650k if you find a 'cheap' builder) ($70k extra - 10% contingency for unknowns and also subdivision post construction) = approx $800k... If you go with a mainstream project builder ... add more to that price ... then add more to what you initially added for safe measure.

    - After this is it feasible? for example; ($505k*0.8) + $800k = $1,204k. That is $600k each side in liability. Duplexes in the area will not fetch that much more than the townhouses selling everywhere for the mid $500's. I'm not a broker but there may be an LVR issue?

    - After that review the block to see if it has the right ear marks for development - size, zone, slope, infrastructure etc.

    - I don't believe there is much savings to be had in the costs of planning. Even if you saved 20% on the above ($30k) it is not going to make the project feasible. I put forward a duplex proposal the other day and am charging the potential client cost price ($0 for my labour) to coordinate this so I'm effectively loosing money, in the hopes I get to build the job as well as their duplex will look really good on my resume - there is not a lot of wiggle room in this because even if you interpret the legislation there are many hard costs to planning (searches, surveyor, architect, fees and charges).

    From my maths, it is too hard to make the numbers stack up for a duplex if you purchase today - multi dwelling is a different story (but you need deep pockets). Are you east or west of Collins Street?
     
    Last edited: 10th Jun, 2020
  13. Hayley Cannon

    Hayley Cannon Well-Known Member

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    Before Covid hit (I haven't checked recently) duplexes in the area were selling for around $650k however, we wouldn't be looking to sell them.

    Property is located to the East of Collins street.

    At the moment we don't have any issues with obtaining the finance however as we haven't completed a project like this before and want to ensure we are prepared before we dive in and make mistakes!
     
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  14. The_Billy

    The_Billy Well-Known Member

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    Just do the maths and then do it again for safe measure. Likewise - if you are not looking to sell these, compare this to your options of adding value in other ways. I'm assuming you will hold for another 10-15 years. For example - you can build a granny flat to increase income, you can outright purchase a 2nd property close by and renovate both, you can sell the current one and purchase one with higher density development potential etc. $800k will go a long way. At the end of the day the game is to make money not develop, if developing is how you get it done, then that is also good.
     
  15. gach2

    gach2 Well-Known Member

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    Well based @The_Billy 's reply and estimates (slightly high but not that far off for a product your expecting to be worth 650k) wouldn't it be better to just buy a duplex instead of going through the hassle of building and paying extra. Also since its initially an IP why not another property like the one you bought? Would think it would be a far better investment than a brand new shiny duplex. In saying that I don't have issues with brand new shiny duplex's but if its a PPOR, not for a IP
     
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  16. Investor1234

    Investor1234 Well-Known Member

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    How do you determine which areas are profitable to build duplexes? Why not Penrith?
     
  17. gach2

    gach2 Well-Known Member

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    You need to do your own feasibilities - Penrith generally isnt today.

    Average house price - 7-800k
    Average Development cost - 7-800k
    Sale prices - 7-800k x2

    You wont make a profit based on above

    Had the house and sale price been double (which are in some suburbs of Sydney) then their would be profit. Development costs are usually the same though might increase 20% for quality of finishings etc
     
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  18. Investor1234

    Investor1234 Well-Known Member

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    Okay, so how about in Blacktown Council where the requirements don't seem to be as stringent as it is in Penrith Council especially with regards to land area? For example, the below property can be subdivided?
    76 Walters Road, Blacktown NSW 2148 | Domain

    Tried to do a similar assessment as the one you mentioned above, on this Blacktown property too:

    House price - 750k
    Average Development cost - 750k
    Sale prices - 2 x 700-800k

    Doesn't seem feasible either as you are just breaking even. In such cases with it is in Penrith or Blacktown, do you think it is better to buy such properties now, let them grow and subdivide in the future where it makes more sense as the selling price should be a lot more than the build price? As you mentioned that what it comes down to - selling price (should be as high as possible) vs development costs (should be as low as possible).
     
  19. gach2

    gach2 Well-Known Member

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    You got that right
    Now change your location Ryde council (their strict but if you found a suitable site) I would probably increase the dev cost to 1 mil but you would start to build a profit
     
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  20. Joseph33

    Joseph33 Well-Known Member

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    Don’t forget, solicitor fees, capital gains tax, gst on sale (if applicable), agent fees, council contributions and interest.
    Most people think duplex’s are easy to make a profit but unfortunately not.