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

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.



In

 

Looks like some very interesting draft changes including decreasing minimum block sizes/frontages. It may well pay to sit tight and think about subdivision and multiple duplex lots...

http://www.udiaqld.com.au/getmedia/...eme-Cover-Letter-Draft-Plan.pdf.aspx?ext=.pdf

 

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?

 

Are you allowed to do a battle axe lot style subdivision?

 

I somehow missed this... I believe so, with 3m access. This would require demolition of the garage.

 

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.

 

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.

 

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.

 

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.

 

Omg... I reckon flick it then and use your dollars elsewhere. I guess you wouldn't be up for much CGT.

 

Might even get a refund WIN!

 

....Or maybe a tax credit to use in the future.

 

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

 

Selling it.

I'm sad that it didn't perform as I hoped, but I will hopefully deploy the money better elsewhere.

 

@Bran Chin up buddy. It's all part of the journey mate. Like you said, deploy that money elsewhere and look to the future

 

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