Townhouse development

This is my first post here so apologies if it is really stupid. My family owns 2 properties. The one in between is going up for sale. We're thinking of buying it and developing a few townhouses. It is zoned R3 medium density residential. I have no experience at this. The logical thing is sell it all for a profit to a developer who knows what they are doing. Surely that is a good plan.

Alternately we could get someone to build some townhouses. It is a dream to build something exactly how you want it but I fear my lack of experience will turn this into a nightmare. Any tips?

A

 

Thanks very much. That was very helpful. I know a builder. Maybe he could do it or recommend someone.

 

I assumed demolishing the three houses. Makes more room. Why did you move the old houses? Heritage?

 

I've never heard of such a thing. Does that apply to NSW? I need to do some research!

 

Ok thanks

 

You need to ascertain the development value of your site. You won't know what it's worth until you have done some kind of site feasibility to see exactly what can be built and then what the end value might be when compared to the costs. Then you can possibly put a price on it when pitching to developers if you want to sell it.

Selling with a DA is also an option. Or lastly building yourself. That's the highest risk option but possibly also the best returns. With no experience, it's definitely high risk.

First thing, ascertain what exactly can be built . If your very serious about it, personally I'd engage a good town planner to do this part of the site feasibility for you to show you all the options of what could be built, all the site challenges etc.

 

Thank you. I will start talking to people.

 

Definitely buy if you get the chance.

Even if you/your family don't do anything in the short to medium term the LOT (3 blocks) will be worth more together than individually.

Particularly if you are near shops/transport as there may be a chance of rezoning in coming years.

Plenty of development going on out your side of town

 

Thanks

 

Talk to a town planner. Other people will be a waste of time.

 

I agree.

But do so with a pocker face...
Only reference your suburb and similar street area.
I'm always reluctant to disclose too many details too early to anyone, because people in the game may see potential you haven't yet, they may also have better resources and deeper pockets (yes, I'm paranoid)

 

Most lots in R3 zones contain only one house and are generally not large enough on their own to allow a townhouse or villa development, therefore 2 together and specially 3 together are worth much more to developers than their individual value multiplied by 3.

I have in the past designed multi-dwelling developments for clients who sold them for a good profit immediately after obtaining the DA.

If the house in the middle is in good condition (or easy to renovate) you could put a tenant to live there and help you pay the mortgage while you prepare the design and wait for the approval. A process like this may take many months or even more than one year so it is good to be prepared.

 

Agree...unless you can talk to somone who has already built the same and even better in that area.

 

But you can have two properties in a suburb. Even right next to each other, and the TP issues affecting one property could be very different to the property next door. That's why I always engage town planners who are the experts in this area.

 

I have spoken to 2 real estate agents and they don't think it is feasible. It is a quiet street with a 50% floor ratio. The houses are worth about $1.7 mill each. We may be able to build 6 townhouses. The cost of buying the house, knocking down 3 then building the townhouses wouldn't leave much room for profit.

 

R3 is supposed to be medium density but FSR 0.5:1 is in practice the lowest density level. Not a good combination.