Subdivision/Subdivide Land/Block - Building at The Back of The Existing House

anj213 on 22/08/2020 - 09:51

Hi All,

Looking for some advice on sub-dividing my block (approx 740sqm come under Knox council) with existing north facing house(approx 40 years old in good condition) at the front.

*I have a driveway which could be used to access the rear of my block.
*Easement on site at the back of the land/rear side boundary.

My plan is to live in the existing house until the new house is developed at the back and move into the back house once completed & rent the front house.
I have met up with a couple of architect/town planners and discussed the possibility of the project & is promising to proceed.

I have several questions:

  • Is sub-division recommended for a good ROI? (Paid approx 700k inc stamp duty for the house few years ago, with current COVID situation is investing in rental property a smart thing to do)
  • What are the approximate costs of sub division (indicative)?
    -I have noticed that private builder charge per square price is pretty expensive, approx 15-18 k per square(If i end up going for 26square house the build would be 17*26= 442), any recommendations here?
    -If anyone's gone through the process can you please recommend any architect/town planner, builders details and provide some figures?

Appreciate your help.

Home & Garden

Comments

  • 87percent on 22/08/2020 - 10:25
    +1

    I wouldn’t be doing anything during covid

    • anj213 on 22/08/2020 - 11:46
      +1

      I was going to get the process started with town planning process which takes about 2 years to get approved from the council anyway, I am hoping the property prices would start to pick up again by then.In saying that I am not sure if it’s a good idea.Thanks for your feedback

  • Stewardo on 22/08/2020 - 10:44

    Not a good ROÍ
    What are you trying to achieve?

    • anj213 on 22/08/2020 - 11:48

      Utilise the bare land at the back of the property & also end up with an investment property to get some tax benefits.

      • conan2000 on 22/08/2020 - 12:34
        +1

        You'd be better renting out the new build for tax benefits. You can depreciate the value of the house and all mortgage interest etc.

        To save on build costs you could look at volume builders and whether they have anything that would work on the proposed subdivision. Engaging architects and town planners and custom builders is likely to cost more. Depends on your budget and how much time/effort you are willing to put into it.

        • anj213 on 22/08/2020 - 12:37

          Thank you, will look into this!

          • conan2000 on 22/08/2020 - 12:48

            @anj213: No worries. New builds offer the best tax advantages.

            I have never attempted a subdivision, but we did a knock-down rebuild a couple of years ago and spoke to a few architects/private builders, it was quite painful and we ended up going with a volume builder from a cost and simplicity perspective.

            It's quite a long and stressful process regardless, and the volume builder removed a fair bit of this for us.

            • anj213 on 22/08/2020 - 14:57

              @conan2000: Thank you, Yes I have had a couple of friends doing the same With private builders and it had taken for ever to finish the build, i am not sure if they(volume builders) can fit any of their builds into a smaller block, i might have a chat to one and get their feedback.

        • SmiTTy on 22/08/2020 - 13:37

          This is true. But u may want to look at the tax implications (and options) of living in the rear property first and rent later vs just renting the rear without living in it first.

          It depends on your own situation and what u want to do in the long run.

          • anj213 on 22/08/2020 - 15:01

            @SmiTTy: Yes I will definitely consider this, depending on what I am planning to do with the properties, I have another investment property in a diff suburb So have to work out what my long term plan is! Thank you

  • Love a bargain on 22/08/2020 - 13:17
    +2

    I might be wrong but I thought if you're not planning to sell either of the houses, you don't really have to subdivide the land.

    • anj213 on 22/08/2020 - 15:02

      No immediate plans to sell but better to have it titled separately so if I need to sell one in the future I can do it straight away, This has been the advice from the town planning/ architect so far.

  • [Deactivated] on 22/08/2020 - 13:20

    I did the same thing about 16 years ago, had an old fibro on front of a 800m2 rectangular block for about 8 years rented, then built a new 2 storey home behind, driveway down the right side, lived in it for 2.5 years, had the front one rented, sold the front one first just did up the the outside with cladding, windows, gutter, fascia and left the inside. Then sold the new one and used all the profits to build the 40 square home living in now.
    Both got flooded about year after we sold them.
    Nth Coast NSW. The builder had done this sort of thing before so helped with all the council stuff. Main problem was stupid council wouldn't let us torrens title them as the driveway was 200mm not wide enough between old house and side fence, didn't matter in the end didn't have to strata them.

    Had another one was going to do the same but not live in the rear, tenants ruined it over 13 years, couldn't be bothered with it so instead of spending 20k on it, sold it 2 years ago and took the 100k profit instead.

    Can't remember how but accountant swung it so we didn't pay any capital gain on the first 2, last one paid about 8K.

    • anj213 on 22/08/2020 - 15:12

      Thank you, I was trying to achieve the same sort of scenario you have gone through, but not decided on if the hassle is really worth it :)

      • [Deactivated] on 22/08/2020 - 15:19

        Mine worked well as I had the old house before the last property boom, so it alone sold for near 2.5 times what I paid for it. Imagine it would be harder to do now. But if you are going to live there long term could be, it’s like living in someone’s back yard though.

        • anj213 on 22/08/2020 - 22:13

          Yes that’s something I will need to get used to, my plan was to live in it for a couple of years and move to a bigger family home once I Have the budget to build a bigger house, ideally I won’t to build a double story which is 45 sq+, but demolishing the exisiting house is a bit of a waste as it is in good condition, plus I would want to move in towards the city by 1 or 2 suburbs if I am commiting to build a new house

  • jimdotpud on 22/08/2020 - 15:49
    +1

    I did the same thing about 10 years ago in vic (840 sqm, built double storey in rear, used common driveway, didn't subdivide straight away). It will depend on your council planning provisions and any overlays on your property. If you intend to build a double storey in the rear, you will have to take care with the design to avoid overshadowing and overlooking of neighbour's private space and windows. I think townplanning/subdivision cost was around $5k to engage a town planner and conveyancer.

    • anj213 on 22/08/2020 - 22:22

      Thank you, I have a quotation for town planning and the whole process for around $25k(including building permit , structural engineer etc:-), did u deal with Knox council?

      • jimdotpud on 23/08/2020 - 11:47

        This was with Kingston council. Building permit was covered in the builders contract, so i'm not sure what exact cost was, but my builder wasn't owning any of the town planning stuff so i had to engage externally.

        the planning provisions can be hard to meet. I couldn't have parking for the front house in the front yard, i had to put it out the back. both houses were 3 bedroom so had to provide at least 40sqm of private open space EACH and 2 car spaces EACH.

        cost me $15k to put in a stormwater retardation system that the council mandated

  • swimmingtoad on 22/08/2020 - 18:02
    -1

    I did the same thing with Knox council a few years ago.
    What is the land size at the back?
    The restrictions are quite difficult now. Do you have an existing carpark? How many bedrooms is the existing dwelling?

    • anj213 on 22/08/2020 - 22:16

      I believe land size will be approx 270sqm, I will lose the exisiting car park as that will come out as part of extending the drive way towards the back of the property, proposed New carport in-line with front of house with Tandem(this will depend on council approval), Exisiting dwelling is 4 bedrooms

      • swimmingtoad on 23/08/2020 - 15:30

        The carpark will have to be at least 1m behind the start of the exsiting dwelling and you will require 2 carparks for the existing dwelling due to the bedrooms.
        This is half the battle, as you likely won't have enough land behind to facilitate the carparks and the approx. 60m of garden required with Knox.
        About 2 years ago the requirements got a lot tougher, as they increased the minimum garden/rec space required for each lot.

        • anj213 on 24/08/2020 - 18:34

          Yes this is going to play a big role in my decision, if i am not allowed to have a garage at the front of the house for the existing, i might not proceed with the whole idea

  • nonib on 23/08/2020 - 09:39

    Be very careful around Council / infrastructure costs - is about $90k to subdivide where I live

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