Hi all,
I'm looking for some guidance on developing 4 town houses (3 Bed + 2 Bath + 1 Car?? - 90 to 100sqm each?) in Melbourne.
To date, my only experience when it comes "development" consists of renovating an existing house and building a granny flat.
After reading some of the recent posts here lately and meeting a few other investors in person, I've come to the realisation that I've simply be wasting what I have, so its time to pick up and move forward.
My thoughts at the moment are to buy in East Melbourne, looking for a site that costs around $800-$1m. Then build 4 town houses with the view of keeping them all. Not aiming for positvely geared (though it would be nice), but at least neutral. Then maybe sell one off in the future to help speed up retirement.
My view is (and I am happy to be corrected), if its going to cost the same amount to build, i might was well build in a more upmarket area (based on what I can afford).
Some back off the envelope calculations (and seriously these are completely guesstimates which why I'm looking for guidance, because think I am completely out) indicate it may be possible... so here goes (please be harsh - i can take it... i hope )
Site Cost : $1,000,000
Stamp Duty: $55,000
Build Cost: $700,000
Approvals: ???
Holding costs: ???
I'm guessing total costs are around $1.9m to $2m?
Funding I am hoping would go along the following lines:
Deposit for site: Existing Equity
Stamp Duty: Existing Equity
Build Cost: Construction Loan + Equity (for shortfall)
Approvals: Existing Equity
Holding Costs: Savings
Buffer: Existing Equity + Savings
How long does it take to get these kind of approvals through? How much does it cost. Is there something similar to NSW where there is a complying development where approval process is much faster?
The long term goal is to be able to live on rental income (paying down loans through employment income) and be able to leave the properties for the next generation.
Whether or not this is the strategy that suits me, there's only one way to find out, and thats with more information.
Any suggestions would be greatly appreciated. Thanks in advance.
I'm looking for some guidance on developing 4 town houses (3 Bed + 2 Bath + 1 Car?? - 90 to 100sqm each?) in Melbourne.
To date, my only experience when it comes "development" consists of renovating an existing house and building a granny flat.
After reading some of the recent posts here lately and meeting a few other investors in person, I've come to the realisation that I've simply be wasting what I have, so its time to pick up and move forward.
My thoughts at the moment are to buy in East Melbourne, looking for a site that costs around $800-$1m. Then build 4 town houses with the view of keeping them all. Not aiming for positvely geared (though it would be nice), but at least neutral. Then maybe sell one off in the future to help speed up retirement.
My view is (and I am happy to be corrected), if its going to cost the same amount to build, i might was well build in a more upmarket area (based on what I can afford).
Some back off the envelope calculations (and seriously these are completely guesstimates which why I'm looking for guidance, because think I am completely out) indicate it may be possible... so here goes (please be harsh - i can take it... i hope )
Site Cost : $1,000,000
Stamp Duty: $55,000
Build Cost: $700,000
Approvals: ???
Holding costs: ???
I'm guessing total costs are around $1.9m to $2m?
Funding I am hoping would go along the following lines:
Deposit for site: Existing Equity
Stamp Duty: Existing Equity
Build Cost: Construction Loan + Equity (for shortfall)
Approvals: Existing Equity
Holding Costs: Savings
Buffer: Existing Equity + Savings
How long does it take to get these kind of approvals through? How much does it cost. Is there something similar to NSW where there is a complying development where approval process is much faster?
The long term goal is to be able to live on rental income (paying down loans through employment income) and be able to leave the properties for the next generation.
Whether or not this is the strategy that suits me, there's only one way to find out, and thats with more information.
Any suggestions would be greatly appreciated. Thanks in advance.