Large R2 Block vs Small R3 Block - Property Development

Is it better to purchase a large R2 Block or a small R3 Block if the price is the same?

For example, as per the below link to Penrith Council, you need a minimum of 650m2 to build a duplex on a R2 zoned piece of land and you need a minimum of 550m2 to build the same on a R3 zoned piece of land. I have seen a number of listings for R2 zoned properties that are about 750m2 and R3 zoned properties that are about 600m2. Which one would you rather go for if the sole criteria is about proerpty development potential in the future?

Also, after securing a property with developement potential (R2 or R3 zoned), how does one secure another loan to raze the existing property and build a duplex or several TH (townhouses) on it? Do you just use the existing piece of land as security for constructing the new dwellings?

Last set of questions is how easy and how often do individuals (not builders or property developers) actually build duplexes in Western Sydney, and at what stage is it considered ideal to build a duplex/TH? Do you need to wait for the existing property to grow in value to some magical ratio before it makes financial sense to build duplexes or TH on this land?

https://www.penrithcity.nsw.gov.au/...opment/Residential Development fact sheet.pdf

 

I don't know about the zoning in Sydney, but based on what you have said, surely the larger property offers the potential for a bigger home & more outdoor space which will be worth more money to a potential purchaser or tenant (all other things being equal - location, aspect, etc)

If you have a Fixed Price Building Contract with plans & permits, you can get an 'In One Line' valuation, to confirm the end value of the development that the lender will accept as security. You need to be confident of your numbers though, as there are plenty of costs involved to get to that point.

 

If youre building a duplex im pretty certain frontage needs to be 4m from the front and the backset needs to be 8m from the fence if youre building a 2 level building. On a 550 sqm block of land, it won't be a big house.

 

How does this actually work? Do I need to save a deposit for it just as it with a normal home loan? Also, does you are referrnig to fall under commercial lending?

 

With all due respect, buying a property to knock down & build a duplex is often not viable financially. You need to take into account the cost of purchase with all associated expenses, then the cost of demolition and rebuilding. Remember that building is often more expensive than it would appear and many companies don't do driveways etc. So you really have to be sure of your costs before you start.

You are much better placed looking for R2 with 750sqm or greater where the existing home is in a position making it viable to keep (and reno) and put a secondary home on the block.

There is a Real Estate Agent that I know of, that has done one of these consistently every year for around 20 years.

 

Many lenders will allow you to build 2 on one title with a residential loan.

 

What’s the reason you mentioned 750sqm or greater? Why that value and not say 650 or 800m2 or whatever?

What does that RE Agent do - help build GF or help find properties with GF on it?

Have you yourself ever built GF? It seems from your previous posts you seem to be into buying properties in Western Syd and doing renos.

Also if you had about $900k to spend now, would you rather buy one large R2 block or 2 x smaller ones such as these:

1) 14 Weber Cr, Emerton
Guide is at $455k for 645m2!
14 Weber Cr, Emerton NSW 2770 | Domain

2) 24 Weber Crescent, Emerton
Guide is $530k for 555m2!
24 Weber Crescent, Emerton NSW 2770 | Domain

So total comes to $985k, a huge total of 1200m2 land area, and expected rent at say about $800k (4.2% yield). Both have GF potential (> 450m2).

2 x Small R2 Blocks VS 1 x Big R2 Block - Which option do you think stacks up better towards building a multi property portfolio?

Properties like these at Emerton can also be found in Lethbridge and Bidwell. If you expect St Mary’s to grow which everyone is saying, then the growth should trickle down to these areas too eventually. Also, it will be strange if Marsden Park has $800k houses, nearby Schofields at $1m, neighbouring Mt Druitt going up, yet Emerton, Bidwell and Lethbridge not growing, so that’s why I expect these suburbs to grow too. Your thoughts or anyone else who is reading this?

 

If land is over 750sqm you can build a DETACHED dual occupancy, which you can put on separate title. No need to demolish the existing build, so long as the existing build is not taking up too much space.

He buys homes on large land, moves in and renovates while the new build is being built. He subdivides, and sells the old home, moves into the new home, then sells that a small time later.

I'm confused. Your initial post was about building a duplex, not a granny flat. You can chuck a granny flat on the back of almost anything.

[/QUOTE]
Also if you had about $900k to spend now, would you rather buy one large R2 block or 2 x smaller ones such as these:

1) 14 Weber Cr, Emerton
Guide is at $455k for 645m2!
14 Weber Cr, Emerton NSW 2770 | Domain

2) 24 Weber Crescent, Emerton
Guide is $530k for 555m2!
24 Weber Crescent, Emerton NSW 2770 | Domain

So total comes to $985k, a huge total of 1200m2 land area, and expected rent at say about $800k (4.2% yield). Both have GF potential (> 450m2).[/QUOTE] If I had $900k to spend, I wouldn't have enough to buy both of those.

It all depends on what the end goal is. Are you looking for splitters or GFs?

There's already lots of growth in those areas. Plus, your original post was about building/developing in Penrith Council. This area is Blacktown Council, so a different set of rules applies.

You haven't been paying attention if you think they're not growing.