This is not a common project but sometimes a site could be 2 or more lots of land on the title. Rather than having to subdivide the title can be lifted and you end up with individual blocks again.
This was the first project we did getting into the property development industry. A 600m2 site was 2 lots on the title with an old termite damaged house. This old house was demolished and title lifted to give us 2 separate torrens title blocks of land. We then sold each site as a house and land package with a builder. It made a profit of approximately $60,000 without us having to outlay the construction costs.
This type of project is more complicated than a single home and requires more expertise. It can involve building 2 new homes on vacant land or adding 1 dwelling to a site with an existing dwelling.
In general, these projects have a timeline of 11 to 14 months for approvals, construction and final solution. Returns have averaged around 50-80% on cash required (if bank lending is 80% LVR).
This is technically a dual occupancy style project generally. Some sites are better suited to attached dwellings (what many would call a duplex). For example, the land size may not allow for the 2 dwellings to be kept detached but there is still good enough margin in the site to make the project profitable. Whether the duplex can be subdivided as strata or torrens title can depend on various factors.
If a site meets all the relevant approval laws, then you can look to subdivide without being required to build a dwelling to lock up stage first. There are still certain costs and steps involved in the process but it gives flexibility to the development. You could sell the site with DA approval only or finalise the subdivision and sell as existing house / vacant land. Developers may still build on a subdivided site and sell the final project to the market. It all depends on cash flow, projected profitability, personal circumstances and goals to be achieved from the site.
A site is classified as multiple dwelling housing once you have 3 or more dwellings in the development. The rules for approval are different again from that of single homes or dual occupancy.
Larger multi-dwelling developments will require much higher cash input, but the profit should also be significantly higher. It is always important to do a feasibility of every site being considered.
Haven’t granny flats been a boom development of recent years? They are low cost compared to other project types and can give excellent rent returns. The construction time frames are also much quicker than standard homes. Granny flats are assessed under secondary housing so is again different to the other developments for approval.
The downside to a granny flat is that you can’t sell it separately from the other house on site. Strata and torrens title properties can be sold individually if registered as subdivided.
Granny flat projects are typically undertaken for positive cash flow rent returns or family circumstances. They are not often done as a development flip for immediate profit on the sale.
While we have done minor renovation works on some existing homes as part of our developments we are not specialists in this field.
The above example projects information is general in nature only. It is not personal advice or recommendation for an individual or company. Any site needs the purchaser to conduct due diligence and it is recommended you speak with experts such as solicitors, accountants, financial planners, approval bodies (eg Council and local certifiers), builders, real estate agents, developers or any other relevant contacts involved in a development process. Individual circumstances should be considered to determine whether a site suits a person(s) or company needs.
Approval and project requirements often vary from Council to Council or even suburb to suburb within a Council area. The outcome on a site is based on these requirements including the individual assessing officer’s opinion of the development. Two different officers within the same Council can come up with different requirements on a development. Hence, while knowledge, expertise and best efforts in planning are undertaken to minimise the risks if we do any works for a client, no guarantee can be provided regarding the end result of a development.