Ok, so I'm fishing for some basic info here, I have no development exp, only renovation exp. Have looked at a 1020 m2 block in Logan with the existing house positioned at the front of the block allowing the rear to be cut off to make a separate lot, many others in the street have done the same. Can anyone give me a basic idea on the costs for getting the split done including getting services connected, driveway, drainage, surveying etc? Should I aim for a 20% return on a basic development like this? Existing house is a 3 bed 1 bath, asking $380k. New lot would be worth 200k approx (for a vacant lot) and the existing house would then be valued at around 320k after subdivision. Sale price of the new lot with a new 4/2/2 house might get 420k. Any profit there?
I would allow $70k Infrastructure Contributions are $28k alone DA App, surveying, plan sealing $12k That is without doing any actual work.
Had anyone discussed anywhere in PChat or SomerSoft as to why QLD charges a whopping amount of infra fees and because of this, the development cost is the highest in the country
Thanks, I had a rough figure of 60, 28k for infa and 30k to do the rest... Sounds like there would only be a half decent profit if constructing a new house on the new lot...
What would be the approx time frame from engaging a town planner to having the lot registered and available for sale?
Here is an example http://www.drakehomes.com.au/wpbdm-category/removable-houses-south-east-qld-northern-nsw/ Not 100% sure if Logan Council allows it but yeah, it's worth a try!
I see a lot of talks on splitters / reconfig lots in QLD. How easy/hard is it to sell a vacant lot after the split / reconfig? Wouldn't it be easier to sell a ready to move in house + land?
Hi Rico, Last time I was there, a month back. I went to the front desk @ logan council. Very helpful staff. couple of members on this forum could guide you with relevant info. Good Luck.
Anything will sell at the right price, suppose its part of the due diligence that your numbers stack up. A lot of the house and land are not in premium locations hence splitting...
in basic form, it doesn't look like a good enough return. selling off the vacant lot only gives you a 10 % return. you've still got stamp duty, agent comms, services, CGT etc etc. if its your first development or looking to learn then yeah its not too bad because youre learning the ropes at a low buy in price. that being said, remember that if you do the deal, you're more than likely tied down for 4-6 months and not able to do any other deals. thats why im a big fan of developements that have an exisiting house like this one and sell off a spare block (as long as there's enough profit in there!). continuing to the build or even a removable house adds more holding costs, time and cashflow required. for example, most councils need you to put down a security deposit when doing a removable house. another $15 - $20k or so sometimes!
