QLD Rochedale South dev block?

Long time lurker and unfortunate chronic procrastinator.

Went to have a look at a place in Rochedale South earlier in the week, between Underwood Road and Pacific Motorway. It's a large 900sqm+ rectangular, flat block with a wide frontage. The house itself is in bad shape, but easily workable.



Notes on the place:

• Currently walk able to pharmacy, cafe, bottle shop, IGA etc, with buses along the main road (Underwood Rd) into Brisbane CBD and down into Springwood/Logan.
  
• It will be walking distance to the Rochedale busway station when the extension of the SE busway between Eight Mile Plains to Springwood is complete. It will run parallel to Pacific Motorway. Luckily it won't become thoroughfare for traffic/buses.
• Currently is low density residential zoned. The blocks 2 streets away on the main road have already been rezoned and there are a few coming onto the market with DA for 14 units on similar sized lots.
• Rochedale Estates just next suburb over to the north median prices are now in the 7-figure range for newly built small lot sized properties. They've been expanding further south towards Rochedale South.
• Position of the house on the house allows battle-axe subdivision with space for driveway/handle down the side. It will be on a stormwater easement, but don't see it as major issue, as no habitable structure will be on it if it's in battle-axe formation.

It seems like the vendor's asking price is around 10-15% higher than comparable properties based on desktop studies, RPData, sales history, etc. Albeit the land is larger, but the house itself is in bad condition. I believe the high asking price is based on those 'development potential' and infrastructure improvements I listed above.

Not looking to demolish the house yet, or subdividing into battle-axe, but do see there would be demand for nicely built 'family' type houses in the future, given the neighborhood, schools, amenities etc nearby. Could achieve around 4% rental yield in the meantime, which works for me at the moment while I evaluate my different options

• Retain existing house, build another at back for dual occupancy (has been done in the area already)
• Retain existing house, subdivide battle-axe at rear then sell.
• Demolish house, subdivide so both lots have street frontage, sell...but one will have stormwater easement running down one side from street to back.
• Do nothing - wait for rezoning, or just sell off again in future.

Whichever option above is chosen, still looking at land banking the property whilst retaining the existing house to have some revenue and negative gear. Could they be signs of an area that could be heating up right now?

What are the more experienced investors thoughts on something like this?

 

RS falls under LCC

you need 1000m2 to subdivide on LDR lot, unless I miss out on something

You may be able to get away strata tilting, ie retain existing, build a dwelling at rear, but this would be under strata/community title.

 

Its a bit of a stretch to compare properties south of Underwood Road with the new estates north of Miles Platting Road. I very much doubt they will ever be comparable in any way.
Marg

 

I am by no means an experienced investor, but Rochedale South is a nice area. And on some places now you can divide into 350m2 blocks. However just remember that Rochedale falls under Brisbane City Council, while Rochedale South under Logan City Council, this has implications on many things such as developments, land value ect. I lived in the area for 7 years, further down on Underwood road past the IGA and before Parfrey road, a lot of those blocks are already under going subdivision. The lot right on the corner I believe was subdivided into 6 or 7 blocks. A friend of mine sold his place there in 2012 for $470,000, he got $15,000 more than his asking price and sold it in 3 days, and it was smaller than 800m2 block, approximately 650m2 from memory.