Worthwhile to subdivide coastal block in victoria or sell as is?

Hi guys

We have a town block in a popular coastal town in South Gippsland. Size is 772 sq metres, 19.2 metre frontage 40 metres depth. Street is on East, long boundary faces North. Reticulated sewage easement at rear of block along West boundary fence. It has a very old, run down, 6 sq hardy plank home on front of block, on NE corner and which means there is enough room for a battle axe subdivision at rear of block. The local council advises that subdivision is possible

There have been many blocks of this size subdivided in the town in recent years and they are popular with retirees, pensioners, many who wish to downsize and stay in the same town and new people moving into the town. Most have sold quickly. There are 2-3 on the market at the moment, asking price of these is 275000-320000.

One issue is that the block has 6, 15-20 metres high gum trees, most of which are close to boundaries and another 6 small trees up to 6-7 metres in height. 4 of the large gum trees can be removed without permits as they are within 10 metres of the original house.

It is a desirable location and I have an offer at the moment to sell as is for 475000. The real estate agent listing my property suggest that if I were to subdivide and keep original house that I could sell rear block for 260000 and front block with old house 350000. I know the local prices well and believe his suggested selling price are realistic.

As an aside blocks that size with completed 2, 2 story townhouses are selling for 650000+ each, but I would be reluctant to go down that path as it is a major cost to fund such a project and I have no experience in this area.

He advises subdivision could take a year and cost 30000-50000. I have no experience in subdividing and and would simply wish someone to coordindate the project.

My question is the indicated cost and timeline for subdivision realistic and are there are recommendations for companies/people I should talk to for more detailed costing.

It seems like an excellent return to gain another 100000+ for an outlay of 50000, or am I missing something?

Thanks for any information.

Have a good day

Kevin

 

Hi Kevin, i am a land surveyor and do quite a lot of these kind of subdivisions in a particular regional area of victoria (between melb and ballarat). As you are in a regional town i would highly suggest using local experts, so recommendations of consultants on here will be of limited value. The main reason for using a local is the travel, if you are in gippsland it will cost a bit to get consultants to come from melb area.

You will find there will be a few realestate agents in your town that sell more of the subdivided land lots. Contact them to find the local players. You are looking for a land surveyor, civil engineer and a planner (rural/regional surveying firms sometimes offer all 3 of the above disciplines), once the sub is completed you will need a conveyancer/lawyer to lodge the plans with the titles office. Also speak to an accountant about the project before you do anything. Regional subdivisions over certain sizes generally don't require design plans to be drawn, and can be a land subdivision only. Which means you probably won't need a designer on board, and the planner/surveyor can manage your application.

The cost estimate looks about right, but dependent on what is required with getting the service connections ready and any planning permit requirements from the local council. You might find you need to put in a new crossover, driveway, garage/carport, water tank(s), electricity pit, water/elect meters, sewer/drainage connections etc. The planner/surveyor/engineer you engage can give you a breakdown of expected requirements and a rough budget.

The time it takes is about a year, depending on everything going fairly smoothly. In an ideal world it would be quicker, but there are generally holdups along the way.

 

Thanks Lixas for your input

cheers

Kevin

 

I’m not sure the exact area you’re talking about but I’ve been dealing with bass coat council on a couple of projects and I would be suggesting that you’d be looking at 2 years by the time you can get the money from selling.
12 months for approval, may depend on complexity of design but that’s how long mine took.
6 months for the works to be completed
A couple of months to sell
A couple of months for settlement.

I have found that no one is in any real hurry down that way and things take longer to get moving than in Melbourne.

Also consider GST and CGT in your final numbers.

 

Hi Brendan

It is in the Bass Coast council. I would not like to wait for 2 years to get a return on my outlay. Are you suggesting two years if I simply subdivide and sell new block as land only?

Cheers

Kevin