Thinking Subdivision? House Lifting?

Thinking Subdivision? House Lifting?
December 15, 2017 Great Living Homes

Here is a feasibility study summary

A subdivision project can more often than not have great dividends and be a great option for the person sitting on a bit of land in a high demand area. You split the land in two, or maybe three, sell off the other lot/s and make way more money than if you sold the property as a whole.

A lot of the time, in these situations, people tend to demolish the existing house so they have a simple piece of land to divide up and sell. But there is another option…

You could shift the existing housed backward or forward, lift it up in the air and build a bottom story underneath, then you can sell off the other part of the land or build another house.

You may tend to ask questions like, how much will this cost?  When will my project finish? How much profit can I actually make?

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The feasibility of this kind of project is actually better than the other option of demolishing and rebuilding new mandurah homes. Take the below example of a typical R30 subdivision:

 

Feasability to Lift up, build under & SubdivideFeasability to demolish and rebuild two 2 storey Homes
Purchase Price$650KPurchase Price$650K
ESTIMATESESTIMATES
Strata Costs$30000Strata Costs$30,000
Replace top half with hardi plank$5500Demolish Existing Home$20,000
Replace Bottom half with Cladtex$7500Rebuild Front (3×2) 2 Storey Home$365,000
Demolish/refurbish bathroom and toilet$15000Rebuild two Back (3×2) 2 Storey Home$730,000
Lift & Shift House$30000Site Works Allowance$17,500
Site Works Allowance$5,500Demolish & Rebuild 2 homes$1,162,500
Build underneath$210000Extra Interest/holding Costs$35,000
Cost to Lift & Build under$337,500Total Cost of Development and Land$1,847,500
TOTAL$987,500
Sell Rear Lot #1$320KSell Front Home680K
Sell Rear Lot #2$320KSell Rear Strata680K
Sell lifted home$650KSell rear Strata680K
TOTAL$1,290,000TOTAL$2,040,000

Two examples we see here. One is to lift existing house up and build underneath and then subdivide. The other is to demolish, subdivide and rebuild.

 

The total cost to do each project differs greatly and the return also differs.

Cost/return estimate Lift and build under: 1,290,000 – 987,500 = $302,500

Cost/return estimate to demolish and rebuild homes: 2,040,000 – 1,847,500 = $192,500

This example is of a typical R30 subdivision in the Perth area. The time frame difference is actually quite amazing as well. To lift up and build under you are looking at approximately 6 months. To demolish everything and build from scratch it will be around 18 months.

Many real estate agents and Home Builders Mandurah will tell you to go with the demolish option, but with 2 story homes built by Great Living Homes  who have to ability to make things faster and cheaper why would you go anywhere else?