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Need help with subdivision

Discussion in 'Development' started by Jezzalinko, 3rd Jun, 2016.

  1. Jezzalinko

    Jezzalinko Member

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    I brought the house in Quinns Rocks late 2012 as PPOR / Investment due to the purposed R60 zoning change, which at the time was planned as Priority 2 infill for the City of Wannerroo (after Koondoola & Girrawheen which has recently been completed). Back then I had 7-10 years in my head for this to happen. The block is currently R20 and is 931sqm.

    Previous owners had plans drawn up and submitted to council for a battle-axe subdivision retaining the original home.

    If I was to subdivide the rear block, could I build a 4x2 double storey home on the top half of the rear block with the future view of splitting the block again horizontally when / If the zoning changes? Obviously need to consider the current R20 building guidelines, but to me it seems like i can retain the full development potential of the block without regret spend on the original home. It allows me to re-value the block for equity, build the rear home while living at the front, then have the option to rent the front out when i move into the back home.

    I recently toyed the idea of adding a double storey to the existing home, but at around 200k with nowhere near as much value add, its lost money. If this idea works, then the front block essentially becomes a 2-3 unit site utilising the side driveway / street frontage or could be a reno project.

    Picture attached below.

    subdivision_R20.jpg
     
  2. Aaron Sice

    Aaron Sice Well-Known Member

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    There is nothing saying this can't be done; in fact, this is future proofing your subdivision potentia, so two thumbs up from me.

    Just have the proposed future subdivision Deposited Plan built into your Strata Management Plan, and made aware to any future potential purchaser (or tenant, now).

    Good luck!
     
    Perthguy likes this.
  3. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    What is a..... PPOR / Investment....Which one ? Your intention to buy to develop seems clear.
    Your development intent may affect what you think may be a main residence and exempt. Read TD 92/135
     
  4. Jezzalinko

    Jezzalinko Member

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    It's my way of saying "live in now, develop later".. understand in the accounting / legal world the two don't like to sit next to each other.

    Cheers for the feedback Aaron!
     
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  5. Aaron Sice

    Aaron Sice Well-Known Member

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    No prob. Anytime.
     
  6. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Yup - it would be much like those fancier ones we talked about where they have left the front of the block vacant to put 2 lots in later on.
    Your reasoning is sound and future proof.
    As to tax stuff, it's complicated but I'm sure it will work out still favourably.
     
  7. John Bone

    John Bone Well-Known Member

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    What you are proposing from a subdivision point of view may be logical but it does not stack up from a marketing perspective. There are currently no Townhouses listed for sale in Quinns Rocks (that is what I call I 2 story house on a small block) and in the houses listed the lot sizes are a lot bigger than 300 sqm. there are some house listed that are more likely to be townhouses given their size and appearance but this is a very small market segment. There are only two sales dating back to 2012. The suburb also has 83 properties listed for sale which is 2.55% of the total stock versus a state average of 1%.
    I think you need to spend some time looking at whether there is a market for your end product before you worry about the intricacies of a subdivision.
     
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  8. Jezzalinko

    Jezzalinko Member

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    Appreciate your response John.

    Quinn's Rock's isn't your typical suburb. Rp data or realestate.com don't really give a true reflection on the "old" section of Quinn's rocks.. it's effectively two suburbs which fall under the one name. Lot sizes, ocean views, Tennant / owner reputation (state housing) and the zone planning / potential are completely different, and this is apparent when you split the suburb are recalculate the median house price.

    It is hard to understand the market demand given the r-codes have not yet changed and townhouses haven't been built. I would be one of the first likely to build townhouses once the codes do change.. but as a comparison point to a similar lot size / townhouse in the surrounding suburbs - I blow them out the water given the attributes Quinn's has over the other suburbs. My initial sums have shown I can deliver the same product for the same price and maintain a healthy margin.
     
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  9. Aaron Sice

    Aaron Sice Well-Known Member

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    First movers are often the ones that make money.
     
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