First Sydney development townhouse/Duplex questions

Hi all, just found out about this site today and amazed at the wealth of information.

I am now in a position alongside family members to be able to purchase a land with a budget allowing 1-1.2 million, and further 700k - 1 million for the building.
I have many friends in the trades and so will not have to pay massive fees to a builder.
Also it will be paid without bank loans, so there is no major need to rush a sale etc
This is my first experience in property developing and so have alot of research to do before embarking,
But am looking for advice on which areas in Sydney should I build a duplex or set of townhouses in, being the first project I want to start with maybe a duplex or 3 townhouses?
Happy to rent out them out or sell one and keep one etc
Mainly looking for advice on which suburbs would I be able to afford to do this and get a decent return from it?
I also have heard people are paying 700k for a duplex build ? Isn't that excessive?

Thanks in advance

 

My mortgage guy at the bank was laughing at me when I said to him I reckon I could get a duplex built for 600k and I didn't believe him till I started asking for build prices from builders so the 650-700k mark seems reasonable.

 

Need to clarify this bit, what's the end goal? Why are you considering this vs other investment options?

 

Mate if you're ready to dump $2m to $2.2m on a development, you should be doing some due diligence and feasibility on certain areas yourself.


However with that budget, on top of my head, maybe reveaby and padstown might be an option.

 

You will have to go through a builder for your project no matter what - even if you have friends with trade licences you need somebody with a builders licence as well. You cannot do an 'owner builder' application for a higher density building like a duplex or townhouse group. Likewise you will not get CDC approval until a builder has taken out a HBCF policy even if you are paying cash for your build. This warranty is for you, but applies to the house for 6 years so even if you sell the house in a year the future owners still have that protection.

Similarly you need to consider how much you are really going to save by not using a builder and doing the project yourself. I have many friends who think they get great deals on trades but it simply does not compare to what I get, because all my trades work on a production line. They know that when I give them a call to do some work, they are being called at exactly the right time and they won't be wasting a day, they will come to do the right amount of work, everything will be ready for them, all issues will be resolved ahead of time. So they give me cheap pricing as they won't have overruns and losses.

The $700k duplex build price is actually pretty cheap if you get that price just sign that builder up. A couple of years ago I would say it was a normal price but now it is quite cheap. It also depends on the area that you are building in, as $700k is on the low end of the spectrum the duplex will only really be suitable for your western suburbs like (Mt Druitt, Blacktown, Penrith) or South Western Suburbs etc. Naturally if you are doing a development you are creating a product for a certain market and if you try to sell the wrong product in the wrong market it just won't work.

Just be mindful there are a whole array of other costs such as contributions, DA fees, reports etc that you need to consider so it's not just the build cost.