Resi converstion pitfalls to watch out for?

Hi expert,

Have a resi IP (Melb eastern burb) but left vacant after tenant left and soft rental market.
Thinking about turning it into a dental/medical use with about 2-3 practitioners in mind.

Need some advice & recommendation on following:
1. Good reliable experience town planner who has experience in this and quite quickly
do preliminary assessment and advise on feasibility.
2. Pitfalls of change of use for resi dwellings? Am I expecting a huge escalation of council rates,
land tax, water rates etc?

Thanks,
FXD

 

Will you get away with it as a home occupation or an exemption for medical uses in a residential zone?

 

Not a home occupation but a planning permit for med use in resi zone.

 

That is a hint Check the permissible uses under the LEP (medical often is a permissible use as a home occupation).

 

GST is one issue. The USE of the dwelling affects the GST treatment. GST applies to commercial rents. Thresholds could apply. Any costs to alter may have GST and could be creditable. If so it may lock you in to GST on rent if under the $75K rent threshold. ($1442p/wk and up)

Off street parking may be a issue for staff and customers as well as safe access for deliveries etc A street inside a weight limited road may pose more concerns that one not on a weight limited road. All part of the TP role. Most TPs would give a preliminary idea of issues and costs and then if engaged develop the plan.

Other uses that are "dry" may limit costs eg physiotherapy, psychologist etc. dental needs substantial plumbing, wiring etc eg Xray area, lead wall linings, power upgrades and internal insulation for noise where a dry medical for consulting / treatment rooms etc is easier. Flooring must be medical compliant for spills eg vinyl up walls. As a guide, a fitout for three chairs incl Xray, could run at easy $300K per chair and upwards. I know one with 4 that cost $1.5m and up. They engaged a dental design specialist. The dentist normally pays that but will need it ready for that purpose. They had a blank shell making it easier and cheaper than a "reno" may be. Lighting may also need major upgrades eg LEDs, dimmable and even prewired for TV etc That limits the premises use to dental in some ways.

Many dentals premises are new builds for the difficulties that may be encountered

Should all be considered as part of the choice.

 

Great insights and explanations Paul thanks very much!!!

 

i have a similar investment property with a 50%LVR residential mortgage, would this need to be converted if i change the dwelling use to medical/consulting/ offices but the zoning is still the same?

 

i got a mate that specialises in this - converting resi near hospitals into medical suites.
Very much as Paul says above.
Widening all doorways, blood bucket style flooring, more sound proofing between suites. wheelchair compliant all through. Extra parking is a challenge too.
Council and planning is usually easy, supportive even, as low impact businesses and every region wants to encourage more medical.
But - my mate does alright.
Hard to get a good yield i reckon, but no issue with vacancies.
good luck with it