How much value do plans & permits add?

Discussion in 'Development' started by dan_89, 28th Jul, 2015.

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  1. MTR

    MTR Well-Known Member

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    I agree, they will not be attractive to a builder unless the designs are good. But at the end of the day the figures needs to also stack up for the builder.
     
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  2. Colin Rice

    Colin Rice Mortgage Broker Business Member

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    They are called "site flippers" and this is a legitimate strategy used well by some. Strategy is called a DA Uplift.

    Nope. Valuers will value a property "as is" and wont take into account any possible improvements. The banks perspective is that this may never happen so value "as is". There are exceptions to this due to differnet bank policies and still possible to use "end values" if a DA is in place but thats limited to one bank that Im aware of in the resi space.

    To the biilder yes but to the bank no until the improvements are in place.

    On a side note CBA are taking 8-10 days to pick up a deal and 5 days back in the que for any missing info. Im only using them if I have to because of this service or lack off.
     
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  3. Iamnumber5

    Iamnumber5 Well-Known Member

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    Thanks for sharing that.
    The construction cost on BMT, does the floor area include parking? Parking can add at least another floor on its own.

    I also wonder how much of price difference generally is between two site on the same street, one being in the 4 storey apartment zone and the other is 3 townhouse site.

    One of my site is just rezoned and there is no comparable price for now.
     
  4. wombat777

    wombat777 Well-Known Member

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    BMT site allows you to select ground-floor parking or basement parking options.

    Space for parking and width to suit car turn radius is the critical element as widths below 15m severely restrict the number of parking spaces a site can accomodate. This will determine the number of individual dwellings you can have on the site, with generally a minimum of 1 space per private dwelling. Visitor parking spaces are also required but leniency on the number required will depend on the council and the proximity to public transport or centre zones.

    Profitability is tough to achieve for a low-rise unit-block if end-value of the units is low.

    @Iamnumber5, what council is your site in?
     
  5. Iamnumber5

    Iamnumber5 Well-Known Member

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    @wombat777 i have 2 sites with apartment zoning which I plan to build in the future and keep all if possible. One is in Brimbank council, and the other is in Stonnington council, both in Victoria. It is a big challenge, not sure if I can achieve it, but for now that's the aim.

    Where is your site?
     
  6. wombat777

    wombat777 Well-Known Member

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    I have two, both in Moreton Bay Regional Council. The first is in Deception Bay. I am waiting for settlement of the second.

    Scenario 1, if I can manage it, I'd like to start developing the new site in about two years time. Currently thinking 6 small townhouses with a combined semi-basement car park under as it is a small sloping site. Small townhouses will suit the location and should be easy to rent or sell. This type and size of construction will hopefully be within what I can successfully finance. I already have the necessary equity in cash/shares.

    Eventual sale of one or two townhouses would allow me to do a couple of things:
    1. Payoff or significantly pay down my PPOR loan, which will significantly help with further investment
    2. Free up cash to put towards development of my other property

    Cashflow from retained townhouses should be healthy too.

    Scenario 2 would be to get plans done for a multi-storey development and sell with permits as I wouldn't be able to finance such a construction.

    There are other scenarios too but I think I want to fully explore Scenario 1 first.
     
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  7. undercover

    undercover Active Member

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    A point worth noting also is that some will be successful in having a permit granted and think they can start works immediately (or the person buying the land will be able to).

    However this is not the case as works can not commence until all the conditions have been submitted and endorsed. All permits for these types of developments will have conditions which need to be completed prior to any works on site (Condition 1 plans, drainage and paving plans, landscape plans, construction management plan, waste management plans).

    Its worth the effort as the seller to complete these otherwise the builder/purchaser will not offer a premium price knowing they will still have at best 2-3 months before they can commence works on site (unless they obtain a long settlement I guess).
     
  8. MTR

    MTR Well-Known Member

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    Another point on this that is not mentioned is ROI, (Return on Investment) and market conditions, this seems to be ignored on this forum, but its important to consider this.

    If it takes you 3 years to progress plans and permits and then build, as opposed to 6 months to 1 year to sell with DA and no GST then it may be a very good option to consider especially if you have other projects you can jump into.

    MTR:)
     
    Last edited: 28th Sep, 2016
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  9. wombat777

    wombat777 Well-Known Member

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    Noticed 1 or 2 properties on the permit ready website that were selling with DA and Building Approval. I would say (guess) that no more 5% are offered for sale with Building Approval.
     
  10. undercover

    undercover Active Member

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    Well in Victoria you cannot obtain a building permit until you have endorsed condition 1 plans. The building permit must read in accordance with these endorsed plans.

    So its safe to assume without approved condition 1 plans (this can take a while after the permit is issued as there is often small changes required and then must be stamped up by Council) there is no building approval yet.
     
  11. MTR

    MTR Well-Known Member

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    You can still organise section 32 and have conditions attached and progress sale this way, subject to condition 1 plan approval.
     
    Last edited: 28th Sep, 2016
  12. undercover

    undercover Active Member

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    Many ways to skin a cat as they say.

    My point was just to highlight the that a once a planning permit has been issued there is still numerous requirements to be fulfilled prior to any works on site.
     
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  13. wombat777

    wombat777 Well-Known Member

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    Reviving this old thread.

    Any commercial real estate agents on Property Chat that can provide their perspective on how to value sites with a DA. Plenty of other views above but would be good to get the perspective of a Commercial Real Estate agent ( rule of thumb / method ). Question is for multi-dwelling sites ( units / townhouses up to 10 dwellings ).
     
  14. Iamnumber5

    Iamnumber5 Well-Known Member

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    I am a bit confused to what you said above. $1200/unit to get DA? Or $40-50 thousand total?

    I have been quoted $38,000 for design and town planning fee up to planning permit stage.

    Check out 3 Etna street, Glen Huntly, Victoria. Vendor purchased site for $1,183,000 in 2014 managed to get DA for 12 apartment, and sold recently for $1.8 M
     
  15. House

    House Well-Known Member

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    You can be envious of the builder too, #1 sold for $750k and #2 sold for $690k.
     
  16. wombat777

    wombat777 Well-Known Member

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    The figures above ($1,200 per unit) are just for getting the plans/drawings necessary for a Development Application submission.

    Total figure is $40k to $50k ballpark for the overall process.

    Took me a while to find it but the actual address is 13 Etna Street, but wow - wow - wow!

    Market there is hotter than where my properties are, hence for my site cost-effective design will be very very important.
     
  17. Iamnumber5

    Iamnumber5 Well-Known Member

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    Sorry, typing error.
    It suppose to be 13 Etna st, Glen Huntly, Vic.
     

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  18. melbournian

    melbournian Well-Known Member

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    Depending on the zone The price difference can be 300-500kish depending on the suburb.
     
  19. melbournian

    melbournian Well-Known Member

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    U mean residential growth zone or semi commercial zones ? Seems like u're in sunshine and glenhuntly ?

    Sometimes it is more worthwhile to see if the product sells. No point having a site with 30 apartments and the it is harder to sell off the plan. Also even if u are zoned residential growth zone overshadowing other restrictions will limit the design for apartments

    You could possibly achieve more by having grouped townhouses and a rooftop garden etc
     
  20. melbournian

    melbournian Well-Known Member

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    U mean planning permit as in Victoria ?

    Depends which architect u are using. I have gottten quotes Just the planning permit For e.g 12-15 townhouses would cost 19k all up including contributions, design, advertising, landscape design, traffic engineer, submission by the architect, sketches and rework

    For the 25-30 apartments around 25k

    There is special levy as well for projects builds over a million in Victoria

    Each states are different - diff rules regs and contributions
     
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