Getting Specific with a subdivision in Perth

Hello fellow Perthinians.

I've had a look at the subdivision in Perth threads however couldn't find answers for the questions I have. I would appreciate any advice and feedback from anyone who has been directly involved in a subdivision (green title) and can relate from experience. If you have done a strata and there is something you could assist with below e.g. arborists, then please chime in as well.

If you could answer any of the below I would be most grateful. Thanks in advance.

I am looking at sites in the City of Melville. I have a few meetings next week, one with a surveyor and another with the Council for a quick chat about contributions and some info about services.

Context: a 1 into 2 subdivision on green titles, say 800Sqm block getting cut into 2 400Sqm blocks. Zoning okay, frontage okay etc.

Questions (if you could answer with costs, timelines, recommendations, advice etc.):

Do you have a standard minimum return on cost that you use similar to developments (irrespective of financing - not going into commercial lending or anything)?

Have you had to 'shave' off an awning/part of the roof or the guttering to get your 3m access? What did it cost and which trades did you need to employ? Any recommendations and rough pricing?

Can your 3m access go right to the boundary (say adjacent fenceline) and the existing dwelling? Or is there a 0.5m in there somewhere (between boundary and driveway)?

With services, is the whole process with the service providers - that is with Western Power, Water Corp. and Atco etc.? Or do you engage private trades as part of this process e.g. you pay Water Corp. their headworks fees and they go out and run it or do they provide you with the information and then you have a private plumber come out and connect up the new block for water and wastewater (as example)?

Any ideas about council contributions for a 1 into 2 lot sub? (City of Melville in this instance).

Has anyone had to fill in a pool in the backyard before? Costs/advice/compaction?

If the backyard had an assortment of concrete footpaths, pavers, 600x600 concrete blocks (basically 'stuff') all over it, concrete pad for a shed etc. what was the cost in removing it all?

Has anyone had good fortune with arborists and do you have a basic rule of thumb for costs (trees in backyard not on the street)?

Do you bother to get a scrape with the subdivision and 'ready' the site? Or have you just demolished any sheds and cleared the site?

Have you put in fencing to assist buyers 'see' their block? Costs? Recommendations and timelines?

And has the council put on their conditions to put in a crossover? Or just a clear site and services?

Thanks in advance, hoping to get some thoughts on this.

Stannis

 

Thats a good start.

No. Risk Vs Reward Vs time frame Vs intended end goal. 20% on cost is a good rule of thumb a quick 12 month retain and build at 15% to keep could suit you etc. Lots of factors.

Had a concrete drive cut. $700. Had a steel carport removed and a patio roof, I think 2kish

Usually require .5 or more for garden, but may be a way around this.

If building, you can get builder to price and do. cheaper if you out source or if just subdividing. Surveyor can peg drain lay out etc.

Not many require contributions for a two lot subdivision, but speak to council to be sure.

Depending on size I have heard of costs up to 10k, which makes the sites less ideal.

Have a demo/earth moving company remove it. they will clear block and remove all debri with excavator/bobcat and trucks. around 3-4k to clear and rake site to 600mm

yes. Get several quotes. 4 or 5large trees can easily cost 2k plus.

May as well have it raked at the same time, 600-700mm seems pretty standard. some builders require up to 1m.

Normal colour bond fencing you can get supplied and installed for around $70pm. probably 2 days to do depending on size. Removal around $10 a meter or if asbestos than $40-50 pm.

Most likely will require cross over and mountable kerb before they allow titles. speak to council.

Be aware, you will probably require 4m clearance to allow green title and will have to have totally separate services, so if waste/ water is on other side of the road then big $$$.

Some costs for you to expect
Watercorp 7k
western power dome, $1500
Surveyor, title and subdivision fees $10k+
Existing house will need to be connected to under ground power $1500-2k
crossover and driveway 1k+++++

I hope this helps.

 

Thanks @HD_ACE for that information, especially for providing it in line, and that you're able to cover each one of those q's. Big thanks. Did you have any businesses you recommend for the above (earthworks/arborists/surveyors/plumbers etc.)? I've responded in line, if you have the time to reply.

I've heard of 20% ROC (just talking about subs), and to get it to that ROC I need to be discounting vendors by 15% in some instances, which they just walk out on. In saying that, at a 20%ROC, some of the CoCR can be 80% plus (rough figures of a standard 1 into 2 sub, 5% entry costs, 30k sub, 30k hold costs, 10k misc, 4% exit costs). I'm going to discuss further with the JV partners about where our CoCR strategy is in context with the timelines and risk, and ROC if it comes to that.

Who did you use? Would you use them again?

Just subdividing in this instance, so the surveyor pegs, then you call in your own plumber to do the connection (both water and sewerage)? Or just for sewerage? Water Corp comes out and puts in their plumbing?

Does Western Power sort out their own green dome (I've heard they do) for the site, but you need an electrician to assist with the application? and what about gas?

Do you know who actually filled it in? Was it just the same business that did the demo and earth moving?

Do you have a recommendation for a business? Or a recommendation of a business not to use?

Do you have a fencer that you recommend? I'll have to watch if any super 6 needs to be taken down due to asbestos content, and the majority of sites are older houses, with super 6 expected somewhere in there.

And a concreter could do this? I will talk to council this week.

I've got DBYD services outlined, so keeping an eye on that. Most sites have sewerage on the same side but some have water over the road. Costs for water on the other side? Double?

Can you expand about bringing on the existing house to underground power? I wasn't aware of that.

Thanks so much mate, really getting into the nitty gritty.

Stannis

 

@Westminster @soggy @thydzik @LifesGood @Gingerbeer @Aaron Sice
Hi everyone,

I've seen your posts in other Perth subs, and was hoping that you could have a look at the above and perhaps give me some advice on one or more sections?

Would really appreciate it.

Thanks

Stannis

 

I split a 846 sqm corner block into (2 strata lots), City of Melville (Kardinya).

Took approximately 8 months in total.

Cost approximately $45,000 (including demolition of a large house with asbestos)

Are you interested in sharing the area?? Willagee??

 

@sanj @Skuttles @MTR
I've seen your posts in other Perth subs, and was hoping that you could have a look at the above and perhaps give me some advice on one or more sections?

Would really appreciate it.

Thanks
Stannis

 

Hi MTR,

Yes it is Willagee. My strategy is subdivisions, I'm steering clear for various reasons of the "R60 push" by agents along Leach.

Could you breakdown your costs? What kind of ROC and CoCR did you end up having? Thoughts on the project?

Thanks

 

Perhaps you have already done this, so ignore if the case.

Before proceeding with anything my advice would be to look at end values in the area for blocks of land @ 400 sqm and to keep the numbers real. How many blocks on the market? How long are they taking to sell?

Location in the area?? important there is good, average and bad and impact on end values. Though I like Willagee very much its all good as far as I am concerned, however Perth is in a falling market so I will leave emotion out of this

When selling land it is far better to demolish the house, most agents will tell you this and from experience I agree with this statement. Buyers have a brain block, they physically want to see vacant land?? Once you demolish the land you are committed, becomes a little scary.

I recommend green title, that was a mistake I made, far more desirable and only costs an extra $10K for this.

What will the frontage be for each lot once cut up??

MTR

 

I don't think City of Melville will do council contributions for a split into 2.

You'd be looking at around $30k for the survey strata titles, survey and water/power/sewer side of it. Then I'd allow $5k for the extra clearing and fencing you'd need

Breaking it down it would be around
$7500 water/sewer headworks
$1000 power ($680 for a new dome plus some extra)
$1500 in Feature survey for subdivision
$4000 finalisation of survey including boundary peg and lodging landgate stuff
$3000 WAPC submission for fees for survey strata
$572 WAPC Form 1C application
$408 Landgate lodgement fee
$100 Title, document and plan search
$1500 settlement agent fees to arrange titles into your names
$146 local govt clearance fees

That only came for $20k so I'm missing something hmmm

 

Thanks MTR,

I'm looking at splitting the block to retain the existing dwelling (side access to a vacant rear block). To demo the existing dwelling adds more cost and reduces end resale value so I haven't looked at that for this strategy.

Not sure what you mean by demoing the dwelling for buyers? Are you talking about marketing before the subdivision has been approved in a project where you need to demo the dwelling as part of the conditions??? That's not my approach in this instance, however if that is your point, then noted.

Yes, green titles all the way unless something particularly nice pops up and perhaps its a 3 site or so but that may end up being a build rather than just a sub.

Do you know what your returns and costs were for your subdivision?

 

Hi WM,
I'd be doing a green title sub.
My costs (estimated from surveyor):
Survey fees
Stage 1 $1250
Stage 2 $3500
Total survey fees(+GST) $5225
Lodging fees
WAPC app fee (stage 1) $3244
Landgate lodging fee $621
Local gvt clearing fee $292
WAPC endorsement fee $593
Valuer fees (unit entitlement fee) $300
Total lodging fees $5050
Stage 2 fees
Water and sewerage headworks $7000 per additional lot
Sewer connection charge $3500+ (depending on soil)
Underground power $3500+
Existing house UG power $1200+
Infrastructure charges $check with council
POS charges $check with council
Total stage 2 approx $15,200+

Total initial estimate for sub from surveyor = $5225 + $5050 + $15,200(+) = $25,472(+)

Then costs for crossover, earth works, trees, any modification to existing house (or side carport) to round out the subdivision costs.

And of course, entry and exit costs, holding costs, and possible other reno costs.

 

I am confused, I thought the block was 800 sqm and you are cutting up 2 lots 400 x 2?

I have been trying to search the post/my figures on SS as I started 2 threads on this, no luck with the one I wanted to find
.
Estimated figures from what I recall

$572,000 land/stamp duty
$ 50,000 approx. (strata lots x 2)
$ 7,000 holding costs (approx.)

Both lots sold (within a 8 month time frame from beginning to end)
$400,000
$375,000

There were issues once the lots were strata titled, I ended up with an easement on the rear of the block, due to proximity to high voltage power lines, this reduced the end value of one of the blocks. Also the market went from HOT when I purchased to LUKE WARM when I sold, damn it.

I believe the surveyor should have informed me of this easement, it was shocking when I eventually was advised. Of course buyers would be totally turned off, the easement was 5 metres into my land, across the rear block, therefore could not utilise this land whatsoever.

At the end of the day we have around 24% gross profit, over 8 month timeframe.

Your costs would be less because you are only cutting up 1 lot, I think I have seen figures on SS at around $25,000 from another forum member who has gone down this road.

 

For your other questions about the driveway yes it can be 3m but it's only if retaining a dwelling and I fear that it might not be so acceptable if doing a green title battle axe but do ask the council about that.
Generally you want 3m plus 50cm either side of it.

Part of your title conditions probably is to have fencing finished so it's likely that you will have it all fenced.

Make sure you can meet the open space and courtyard provisions as part of the rcodes if you are putting in new parking at the front.

 

Yes
Earthworks: PM me
Arborist: Dickies trees, have used lots, good job always cheapest. based in malaga but should travel.
Surveyors: Vision Surveys. or else land division or cottage surveys.
Plumbers: No. Actually maybe @noprobs could do.
Fencing. Pm me.

Good idea.

Watercorp will put in a shiny new water meter at the boundary for you. The rest is up to you, ie pipes to houses/lots.

Western power will quote it and contract the dome out. You will then need to run underground power to existing house which may require upgrade to the meter box or if asbestos then replacement. costs a bit. And power to vacant lot I believe.

Alinta (gas) are about the only ones that wont try for a piece of your pie to get gas to the lot.

Most earthmovers should be able to do it. you will probably require a compaction certificate of sorts especially if it will be in the building envelope.

Yes pm me.

yes pm me.

Not sure, must be a few who can.

More than double, Think engineering, tunneling under road, permits etc. at a guess I would say thousands.

It will be a requirement not sure if its council or wapc or western power but it is required. $1500 there abouts depending on length and if no meter box upgrades are required.

I think you missed it in my last post, but you will require 4m at a minimum between fence and eaves/wall of existing house to go green title. 3m is a variance to go survey strata. Then you can run sewer and water from existing house connection points to save a lot of dollars.

You may find this link helpful

http://www.cottage.com.au/wp-content/uploads/2011/12/GREEN-TITLE.pdf

Cheers

 

Many way the local govt might look at it.

Could be 3m for the house section only, or 3m the whole way, or 4m the whole way with an intrusion easement for the dwelling (to a max of 1m) to be rescinded upon demolition...

But your comment re green title and 3m drives is pretty much correct. Even stand-alone survey strata may not be allowed - generally the 3m drive (or portion of it) needs to be common property.

 

You'll need a settlement agent to apply for new titles too.

Your plumber will install sewer junction to new lot. He might have to do some work on extending water mains, but as yours is only 2 lots, it might not be required if Water Corp does it.

For Western Power, your "customer scope of work" is:
1) Prepare pillar exclusion zone for green dome. It could probably be worked out from the surveyor's boundary pegs, or to be safe, check if surveyor wants to peg dome location too.
2) Arrange for your electrician to convert existing house to underground dome (mentioned above)

Western Power are good in explaining everything in layman terms to you. As you're only 2 lots, think yours would be straightforward.

Something for you to check - Would it be cheaper to convert the existing house to underground now as Western Power might subsidise part of it. It may end up cheaper overall, but of course it'll take a lot longer.

The cottage link is helpful. Here's another. Land Surveyor Perth | Land Surveys Perth | Surveying Solutions WA

 

Hi everyone,

Thanks for your responses, and my apologies for the delay.

I spoke with my surveyor last week, and it appears as though going to survey strata will be cheaper, as the green title would require extra costing for the wastewater specifically (something like double). Not sure if anyone has any experience with this, however that was the information I got from the surveyor - green titles have a higher cost in regards to the headworks. Interesting.

So it looks as though we'll run the survey strata option. I think we can also do the above mentioned intrusion in some instances with a survey strata, which may negate the requirement for slicing eaves and the like.

Also if it is survey strata then we dont have to use the battleaxe block r-coding requirements for the land size, which can be an extra 100 Sqm on R20 and even more as the codes go up.

Has anyone had to get the power run from the opposite side of the road? Any information on that? WP extra costs extra time? I'll touch base with WP as well.

Initial negotiations with vendors now, if the purchase price lines up then I'll look to drill down on my initial quotes.

Initial feaso look like this:

Purchase Price $609,000.00 Asking price is $+
Entry costs $30,450.00 5%
Sub costs $30,000.00 Approx
Holding costs $31,515.75 1 year at 5.75%, (current SVR ANZ is 5.56% - 0.6% BF discount = 4.96%)
Earthworks Misc costs $10,000.00 (arborists included and extra removals)
Reno costs $0.00 Could require reno
Mortgage $548,100.00 90% lend
Capital required $162,865.75

Sales Info
Sales price $820,000.00 (123 AGENT appraises 520 & 300, confirmed by another agent and comparables)
Exit costs $32,800.00 4%, allows for 3% commission, legals, advertising
Mortgage $548,100.00
Capital repaid $162,865.75
GST $21,100.00 (GST Margin scheme applied - assume higher than $75k profit in this structure - worst case)
Project Management Fee $22,870.28 (30% of profit before GST and individual taxation)
Profit after GST $32,263.98
Profit before GST $53,363.98

Return on cost 7.51% Pre GST
Cash on cash return 32.77% Pre GST

Profit splits / Gross CoCR
PM 30% $22,870.28
Investor 1 35% $26,681.99 32.77%
Investor 2 35% $26,681.99 32.77%

Just rough numbers to start off with to get a ball park figure, and I use the above template for ROC and COCR and the like to get an idea of potential returns. The PM fees I've put in there to possibly run this under the $75k threshold and therefore not have to pay GST.

Depending on how the deal comes together, then I'll start getting more specific and itemized costs, getting tighter quotes and the like.

If anyone sees anything jumping out at them on this let me know, feedback appreciated.

Thanks

Stannis

 

Contingency.

People always stuff up - sometimes a little, sometimes a lot.

 

Hi Soggy,

Have you got a recommendation for a plumber (and an electrician)?

Thanks for your reply,

Stannis

 

Is the LMI included in your entry cost?