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Highgate WA: 3 apartments

Discussion in 'Development' started by Westminster, 22nd Jun, 2015.

  1. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    The story so far

    Somersoft archived thread (from purchase to May 2015)

    Basic facts
    Where:
    Highgate WA
    What: 249sqm block zoned R80
    How Much: $545k
    When: purchased December 2012, settled April 2013
    Plan: 3 apartments
    Ground floor: 3 x 2 with 2 courtyards
    Middle floor: 3 x 2 with large balcony
    Top floor: 2 x 2 with large balcony
     
  2. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    latest news is that I have decided to go for broke and submit another DA o_Oo_O

    During the SAT appeal last year the top floor was changed from full to a loft and I really wanted a full storey. Last year City of Vincent approved changes to their Town Planning Scheme (TPS2) which allows 3 storeys in this area so I will be resubmitting the DA with the top storey being a full height flat roofed storey.
     
  3. Be Developer

    Be Developer Property Developer Business Member

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    @Westminster ,

    How would the numbers look now with excessive holding cost and recent market movement?

    Is it still profitable to develop this site?
     
  4. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Oh yes, very much so.

    The original feaso using 2012 prices was $500k for a 2 bedder and $600k for a 3 bedder. Prices rose in 2013 and 2014 and are still much higher than that.

    Currently 2 bedders are selling for $550-600k and 3 bedders $650k. If there is further softening of the market is unlikely that it will go below my initial figures.

    At initial figures I am looking at 25% gross profit, so still AOK. If the market is sideways and stable and I can achieve $550k and $650k values then it is 38% gross profit/equity.

    These won't be sold on completion and will remain in my holding 'investing' portfolio. The location is just fantastic and I feel will continue to be a good portfolio keeper.
     
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  5. Be Developer

    Be Developer Property Developer Business Member

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    Great!! perfect example of buying well to begin with....

    looking forward to see progress!!
     
  6. HD_ACE

    HD_ACE Game-Changer Premium Member

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    Sucker for punishment.
    Good luck, Hopefully you get the result.
     
  7. Brady

    Brady Well-Known Member

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    Great work on persisting, if there is light at the end of the tunnel chase it down, not point sitting in the dark.
     
  8. Arnel

    Arnel Well-Known Member

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    What is a development like that worth per sqm considering the land size limitations?
     
  9. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    What do you mean "worth"?
    Do you mean cost to construct?
    Around $700-750k fully turnkey inc all services/headworks etc.
     
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  10. Crido

    Crido Well-Known Member

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    Excellent news that you're continuing both your development and this thread, Westminster!

    Just curious, since I purchased my nearby OTP Windsor St one-bedder in early 2013, I'm assuming (if the original 2013 valuations were accurate) I should reaslise the gains the market achieved in 2013 and 2014, and this IP should be still be worth as much as those original valuations, despite the recent "softening of the market" ... logical, yes?

    Cheers.
    Crido
     
  11. Aaron Sice

    Aaron Sice Well-Known Member

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    are you wanting to use one of the previous schemes, modified to suit the DAC comments?
     
  12. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    I have deliberately not started this project Crido to make you feel better :p
    Most of the OTP developments around are marketing 1 bedders at $395k for a standard cookie cutter 1 bedder. I would hope you'd achieve a value of low $400s for yours due to it's large courtyard. So it's not out of the ball park from the original valuation and as you are holding future growth will help.

    I'm going to go in with the last approved by Councillors plan but simply change the roof from mansard to flat, convert the rear roof garden to a terrace :)D), add some more landscaping to front balconies.
     
  13. Aaron Sice

    Aaron Sice Well-Known Member

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    Can it come back through me for "approval" or "refining" or.....?
     
  14. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Sure as we agreed
     
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  15. Crido

    Crido Well-Known Member

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    LOL ... and thanks! :p

    That'll do at this point - as long as we don't see any more extra costs!
     
  16. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Good news. Last year when Round 5 of NRAS was cancelled I applied for some transfers from Round 4 for developments that didn't go ahead. This was back in December and the Federal Govt finally approved it today.
    The two bedroom apartment will have NRAS allocation - providing more affordable housing near the city and improving tax free income to the SMSF. Win, Win :) The 3 bedroom apartments rent would be too high for NRAS to consider it for affordable housing.
    Thanks to @euro73 for letting me know about the opportunity and managing the application.
     
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  17. MTR

    MTR Well-Known Member Premium Member

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    NRAS too complicated for me, so in a nutshell what does this mean for in terms of cashflow.
    Good news all progressing well:)

    MTR
     
  18. Skuttles

    Skuttles Well-Known Member

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    Great move imo Myf. Curious what was was that cutoff for eligible rent amount?
     
  19. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    I'll keep the explanation as clear as I can and use easy figures which are roughly correct.
    Normal rent $500pw for 2 bedroom apartment
    NRAS rent is 20% less so $400 pw
    Therefore it 'loses' $5200 per year
    However the Govt will give you $10,900 (FY16)
    Meaning you make up that $5200pa that you lost and gain an extra $5400pa.
    Effectively in this instance it's almost like receiving $600pw for a $500pw property
     
    Last edited: 22nd Jul, 2015
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  20. OC1

    OC1 Well-Known Member

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    Simples. :)