• Finance  is your first step in any development. Don't run out of cash so do your homework and work within a cost budget. Allow for the unexpected and contingencies during construction. Take into consideration holding costs, cost of acquisition, marketing, professional fees council fees and contributions, cost to connect services, building cost, subdivision costs to name a few.

 

• How much should you buy a development site for? Here is a simple formula.

 

• The New Residential Zones in Victoria are complex when it comes to property subdivisions. Understand the council planning requirements for dual occupancies or triple occupancy  in the area. Read council’s planning scheme and the schedules which apply. The scheme will let you know the minimum size of land you’ll need for your dual occ and what type of development is permissible. Check for overlays- especially those relating to bush fire where restrictions could occur. This is where we can help. Contact us for a development assessment.

 

•  Property Location is paramount for a profitable property subdivision. Infrastructure, availability of services, schools, shops, recreation spaces, employment corridors, views, cultural context  and transport add value to your development.

 

• Expert Site assessment is the foundation. Search for land that meets the dual occupancy or triple occupancy  criteria. Talk to us. We know which sites work. It’s a complex exercise best left to professionals who will be with you all the way.

 

• Size  of land is important. If it’s a duplex site, you may need a minimum of 16-25 metres frontage in mid to outer suburban rings and less in the inner areas controlled by City of Melbourne, Yarra to name two. Site width for two crossovers is not encouraged by several councils who prefer to see all garages and car parking hidden from the street view.

 

• Check the title, Title Plan and Planning Certificates. Check the planning certificate to see if it is in a bushfire or flood zone or affected by CHMP. You can still develop in these areas but it will add to your build costs. Check the title for covenants or agreements.

 

• Building Cost Budget.  This is very important as the builder will look at the land from a different perspective. We can assist you with the building permit process  and a cost budget to measure your progress. 

 

• Run your development feasibility to ensure the project will be viable. Run one in the reverse format to work out what is the maximum amount you should pay for a site. Of course this will not apply if you are subdividing your own home or land or doing a dual occupancy in your own backyard. What should I include in my feasibility report. See examples.

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• Feasibility study is critical. You might be paying too much for the land or selling prices might be lower than you thought. What data should you input into a thorough feasibility report? Learn about them.

 

• You will need to find recent comparable sale prices from which you can base your end value estimate on this. Talk to agents about the current rental market and what rent could be expected to calculate the projected yield on completion. Most importantly, you need to have a good understanding of the build costs. We advise to do a Cost Budget to set your goals and control any overspending. Over capitalising or getting emotionally bound to a development could cost you in the end.

 

•  Long Settlement  terms help. If  buying a development site, a long settlement period helps and obtain pre-consent from the vendor to lodge a Town Planning Application pre settlement.

 

• Town Planning and Building Permits. Once you have all the approvals, you can then go back to your lender to obtain your unconditional construction loan. As soon as this is in place, the builder can start.

 

• Construction. The build phase for a dual occupancy should be around four months upwards and usually around eight months for a double storey to Certificate of Occupancy stage. Once the building works are completed, an occupation certificate will be issued. 

 

• Don’t forget to order a depreciation schedule; this is simple, just email the plans and builders tender and any other cost details to your quantity surveyor. Depreciation can be very attractive as long as you hold the property.It could run as high as $39,000 per house over 5 years!

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• Build Equity through the property subdivision. You can now apply for the subdivision certificate and once council issues the certificate, you can register the subdivision (after your lender has signed off on it). There is no need to register immediately if you are planning to hold and not planning to refinance as you may find costs such as rates may be a little less if the dual occs are kept on one title.

 

• You may decide to “flick” one of the lots with its own title to a builder or developer who is cashed up to start building now rather than waiting for the 6-12 month period it usually takes to come to this  planning approval stage. So you may  have built equity and value through your town planning and subdivision permit. Talk to us- we know how it works.

• When can you sell the new lot? Ideally after the lot is registered and has its own title.  This could happen early in construction stage after all required services are connected. If not in a hurry to sell, do it later to avoid two rates notices

 

 

Welcome to the world of property development and successful subdivision! Please complete the form below and can advise you if your property can be subdivided. Its a complimentary Service.

Or feel free to call our Founder  direct on 0448 170 132   9am- 7pm- 7 days.