Second storey extension to villa unit in Melbourne east

Hi all,

Have a bit of a dilemma with what to do with a family member's PPOR. It's a 3 bedroom single level villa unit in Surrey Hills which is owned outright. Said family member will need to move out soon due to a change in life circumstances. The unit is in pretty average condition so will probably need a bit of investment to fix up prior to sale. Question is whether it's also worth adding a second level in conjunction with doing interval renos?

How much would a second storey addition cost assuming it'd be to add a couple more bedrooms (hoping for 4 bedrooms plus small study), a bathroom and another living area? I'd be aiming for reasonably high spec given the area it's in.

It feels like a low-ish risk project as it's owned outright, we could finance it ourselves if we wanted to (i.e. no need to involve banks), should not be any tax implications (I think?) given it has been a PPOR for 5+ years and I live in the area so am familiar with it. Thoughts welcome...

 

Yep, well aware. Am just in the concept phase so wanting some opinions. I'm hopeful that Council will approve given 1 of the units on the block is already double storey and there have been a few units in the immediate vicinity that have gone from 1 to 2 levels in the last 12-24 months.

 

The stair will take up a bit of space (most people don't realise how much) A straight run stair to a 2.7 m high ceiling will be 4m long and 1 m wide. A wider , will therefor be around 2 m x 2 m plus a bit
I'd talk to reputable agent and gauge the market - you might be eliminating people willing to pay a premium for a good single level unit

 

@Tufan Chakir makes an important point here - what is the market demanding? What is the demographic buying (o/o, investors & why?) Are they villas sought by downsizers, if so a quality refit is a low risk/higher return/quicker option.

 

Second story extension sounds like a waste of money and very low ROI compared to doing a quality renovation of the existing ground level. Just because it is owned outright doesn't mean investing more energy and money into the property will be low risk or worthwhile. A single story 3 bedder in that suburb would be A1 for downsizers or for DINKS looking to get into a blue chip suburb.

Save yourself some trouble and do a high spec renovation within the existing footprint.

 

this would be good for like prefab upper storey extensions (like archiblox) but you're in an owners corporation and you will need consent of the owners corporation since your neighbours may not want an additional storey with additional occupants

 

I know the other unit owners quite well so I'm reasonably confident I'd be able to get their agreement.

I've never come across prefab upper storey extensions before. Are you able to explain a little further on what they are and what's involved?

 

yeah as long as you get it in writing, (again ppl do change their minds) so yeah good if you can maintain that level of agreement.

go to albert park and south Melbourne - a lot of the old cottages do them around there. where they create an upper level extension another floor. it would depend on the style and build. they are considered quite decent build and also limits the time to build an upper storey as you only settle once it is finally put on and can go to the factory to have a look at it.

 

You might not need approval from the other members of the owners corporation. Depends on if you are building in the common property. Have a look at the title to see what you own and what is common property. Look for whether you own to the external/median/internal walls (where the boundary is defined by your unit), also look to see if the airspace above the unit is yours or part of the common property.

 

There’s a place on corner of Elgar and Riversdale roads (on the right as you head south) that did this. Looks good.
I would ensure MB remains on ground floor so wide appeal. Possibly a junior MB (with ensuite) upstairs.

 

Thanks everyone for your opinions. Will definitely talk to some real estate agents who service the area to see what they believe is in demand. I don't think we'd have any issues selling either given the location but acknowledge it's about maximizing profit. Just out of curiosity, how much would one expect to spend on an upper storey extension? I know it's like asking how long is a piece of string but thought I'd ask anyway. Would be looking to add 2 bedrooms, a living area and a bathroom upstairs.

 

What I haven't heard much about yet is the option of simply selling as-is.

I wouldn't be surprised if that ended up being the best way to maximise profit.

 

Personally don't feel it's an option given the condition of the unit. I think it'd rule out too many potential buyers who don't want to spend the time, money or effort to fix it up. Being single level, if I didn't end up extending upstairs I'd be targeting an older buyer and I can't see anyone my parents age wanting to take on a reno project. Not saying they don't exist but think it would rule out a lot of buyers who would just want to move straight in.

 

I assume you are planning to lift high enough to allow legal head height for future building in on the lower level?
Marg

 

Is it free-standing? Might be a better option if you don't sell as is, to demolish and build new. May not need owners corporation approval, should be taken care of with building/planning application. If they're all joined that's a different situation.

 

Interesting discussion. We own a 2 bdr Villa unit in Camberwell and have been considering something similar. We have street frontage and are on good terms with the neighbors so don't foresee any issues with body-corp. The ROI is the bigger issue for us. Have spotted the Elgar Rd extension and there is another small extension going up on Moorhead Rd, Camberwell atm. We're expecting our first child any day now and are planning on a second at some point so space will be important. Ideally we would like to at least put a 3rd bedroom and bathroom on top but not sure of the costs involved. Surprised not more villa units are being extended on, I'd imagine going from 2 to 3 bedrooms would increase value dramatically.

 

We didn't end up going through with it. Probably not worth it from a purely financial point of view as we're planning just to sell it. Will just make some minor cosmetic improvements. There's a pretty big market for nice, single level units where we are due to having quite a large aged population.

Might be a different story if you're going to stay there long term though. Then it's not just about the $. Our neighbours had a 2 BR villa unit. They spent about $300-350K to extend upstairs and reno the downstairs. They added 2 further BR's, a bathroom and a living area upstairs. May as well maximize the space upstairs once u're up there.

Btw congrats on the arrival of the little one. If u're planning on having 2 kids, you'll want 4 BR's. I speak from experience. We have 2 kids and 4 BR's and we're thinking we need a 5th BR already...