Join Australia's most dynamic and respected property investment community

What would you do with this block? (Cairns - but still)

Discussion in 'Development' started by Bran, 24th Oct, 2015.

  1. Bran

    Bran Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    3,212
    Location:
    At work
    Hi all

    I have a flat 907m2 block in Edge Hill, Cairns (a premium/popular/family oriented suburb with a bit of a cafe scene).

    At the moment it contains a basic 3/1/1 house with a big carport out front, and a massive built-in area out back. Big double drive-in shed out the back. Yield is pretty average, but probably close to neutral. No CG in 7 years since purchase.

    It's zoned Res-2 which permits the following things below. Do any of these options look like a standout worth pursuing?

    There is no rear access, thus a duplex would require demolition of the attached garage and large built-in enclosed rear area.

    A small day care is probably possible with some small configurations e.g. converting the garage to a room, fencing in the carport.

    Thanks for any input.


    Screen Shot 2015-10-24 at 9.43.42 am.png Screen Shot 2015-10-24 at 9.33.02 am.png
    Screen Shot 2015-10-24 at 9.33.37 am.png In
     
  2. Bran

    Bran Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    3,212
    Location:
    At work
  3. Bran

    Bran Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    3,212
    Location:
    At work
    Not so much interest

    Minimum subdivision for an LMR block is 450m2, but currently needs 12m of frontage (I've only got 22m in total).

    If I wished to talk to a town planner, does one go through council or pay for one of the private guys? Does it make a difference?

    Screen Shot 2015-10-24 at 7.11.11 pm.png
     
  4. Aaron Sice

    Aaron Sice Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    895
    Location:
    Ocean Reef, WA
    Are you allowed to do a battle axe lot style subdivision?
     
    Bran likes this.
  5. Bran

    Bran Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    3,212
    Location:
    At work
    I somehow missed this... I believe so, with 3m access. This would require demolition of the garage.
     
  6. Cathy Browning

    Cathy Browning Member

    Joined:
    31st Dec, 2015
    Posts:
    8
    Location:
    England
    I have a similar sized block not far away from yours in Cairns. I am thinking like you of developing it. My thoughts are to redevelop the site by demolishing the existing house and building townhouses. Like you, bought 6 years ago, no capital growth to date. If you want to discuss things further, happy to do so as lived there for three years before it became my IP so know the area well. Also aware of economic proposals for the Cairns region.
     
  7. Bran

    Bran Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    3,212
    Location:
    At work
    Hi Cathy - I've contact some town planners/consultants. I lived there for 3-4 years also.
    Ive crunched no numbers, but I can't see that a simple duplex construction is worthwhile - duplexes are selling for little more than single dwellings. However, a subdivision with 2+2 might just be worth it in terms of rental yield.

    Leaving but modifying the existing house with townhouses at the rear would probably be the best of both worlds

    There is a little bit of development going on, I think there will be a strain on supply as soon as Cairns loses its inertia. It's got lots of positives, but business activity is still lagging as far as I've heard.

    If I can't develop it, Ill think i might flick it.
     
  8. HUGH72

    HUGH72 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,117
    Location:
    FNQ
    I think your right, building costs are high. We built a place about 12 years in Cairns and build costs were 40-50% more expensive than Brisbane, I assume that is still the case. New builds have to meet higher construction standards and Cyclone ratings.

    House prices have continued to rise but only at the rate of inflation.
    Townhouse and unit prices are still very depressed and seem to sell below or at construction cost so there would be little margin most likely.
    A subdivision might be an option.

    Any joy with getting your insurance premiums down? They looked excessive last time you mentioned it.
     
  9. Bran

    Bran Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    3,212
    Location:
    At work
    Hi hugh - yes, premiums down to 2500k. This is an improvement from 6500k.
    There seems very little appeal in keeping it as it is, but unfortunately the 'rising market' is having little to no effect on price.
     
  10. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    4,890
    Location:
    Sydney
    Omg... I reckon flick it then and use your dollars elsewhere. I guess you wouldn't be up for much CGT.
     
    York likes this.
  11. Bran

    Bran Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    3,212
    Location:
    At work
    Might even get a refund :) WIN!
     
    Leo2413 likes this.
  12. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    4,890
    Location:
    Sydney
    ....Or maybe a tax credit to use in the future. :)
     
  13. MTR

    MTR Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    7,299
    Location:
    Perth, Melbourne, USA
    What I would weigh up is even if you can build townhouses/units at rear the front/original property if retained and not an attractive property it may impact on property values at rear and also limit your market, making harder to sell.

    I don't like keeping old homes and developing at rear unless its an area which is highly sort after, or the front/property elevation is attractive otherwise it may be a turn off. Just my opinion, no expert on Cairns
     
    Last edited: 3rd Jan, 2016
    Bran and Leo2413 like this.
  14. Bran

    Bran Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    3,212
    Location:
    At work
    Selling it.

    I'm sad that it didn't perform as I hoped, but I will hopefully deploy the money better elsewhere.
     
    Leo2413 and Gockie like this.
  15. Leo2413

    Leo2413 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    5,715
    Location:
    Sydney
    @Bran Chin up buddy. It's all part of the journey mate. Like you said, deploy that money elsewhere and look to the future ;)
     
    Bran likes this.
  16. Bran

    Bran Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    3,212
    Location:
    At work
    Part of it I guess was that this was my first ever house. So I'm sad about that too. I should still try to time one tax deductible trip to visit, even if I haven't to this point
     
    Leo2413 and Gockie like this.