QLD Seek experienced view for this potential splitter (Morningside, QLD)

Hi all,

I'm to obtain some experienced views on the below block per the scenario I've put forward. I have performed some initial DD and would like to test my thinking below. From talking to Public Trustee, $840k sale price achievable.

46 Foxton Street, Morningside, Qld 4170
- Next door houses are rentals and have poor street appeal
- Houses across the road present much better
- Some development starting to occur on the street, but more so on either ends rather than close to this plot.
- I've spoken to a Brisbane City Council Town Planner 2 private Town Planners. There do not appear to be any considerable issues with the subdivision at face value, beyond an exception being needed for 9m frontages.

Potential plan is to sub-divide into 2 x 449m2 lots (9m frontage), build PPoR on one lot, sell other lot privately (land only). Cost estimate breakdown:
- Purchase Price: $840k
- Stamp Duty: $30k
- Land Clearing/Prep: $20k
- Holding Costs: $20k
- Sub-division: $70k
Total Acquisition Cost - $980k ($490k per lot)

Based on comparable land sales in Morningside:
- Potential land sale value - $550k (intend on selling privately so sale costs should be low). Please challenge me on potential land sale value...
- Minus CGT, let's say $520k net.

Potential gains (in my mind):
- $30k on sale of new lot
- Equity of $60k in PPoR plot assuming $550k value

First time I've put together a high level feasibility plan, but it seems like there may be better options out there to achieve a better return for less wrisk - please pick it apart and highlight what the likely hurdles/trip ups may be.

Thanks, very much,

Greg

 

Apologies, I've just realised I underestimated the CGT component. I'm sure this would be much higher which would mean the benefit of going ahead would be even more negligible.

 

Maybe allow an extra 10k for the - Sub-division: was 70k the quoted price ?..