Scott and Ciane contacted Vision One Projects to find out how they could develop their property in Balcatta. They had a 1014m2 block zoned R40 and their goal was to maximise their profit and pay down debt.
After running through their options we advised them that under the current R-codes they could either subdivide and build 3 or 4 villas (depending on the number of rooms in each) or 8 apartments.
We teamed up with a reputable local sales agent to provide Scott and Ciane with an appraisal to determine the value of their property.
We provided feasibilities to demonstrate all development options available and what profits would be gained over and above what they could sell the block for.
Option 1) 3 Units
Construct and sell 3 x 4 bedroom, 2 bathroom villas
Approx. Gross profit: $140,000 or 8.4% return on investment.
Option 2) 4 Units
Construct and sell 4 x 3 bedroom, 2 bathroom villas
Approx. Gross profit: $373,550 or 21% return on investment
The only issue with Scott and Ciane’s block was a 5.0m drainage easement running down the length of the block and a 1.5m easement running across the back of their property, which could cause issues with our plan to build 4 units as opposed to 3.
We arranged a contour survey to commence the design process and determine the exact locations and details of the easements and what building envelope we would have left over.
We consulted with the City of Stirling’s Engineering Department as well as the Water Corporation and proposed some solutions to be able to build up to or within the sewer/drainage easement.
We believed with the appropriate engineering, we could increase our building envelope slightly more than what would normally be advised.
With the help of our in-house design team we were able to create a development solution with the desired 4 units.
We were able to achieve this by designing two of the units with a single car garage with an additional car bay, which was a better compromise than reducing the size of the internal house areas or of course building only 3 units.
The End Result
In our experience the front unit will generally sell for the most, followed by the rear, with the remaining two units selling for slightly less. Knowing this we focused our attention on the designs of the front and rear units to achieve the best possible outcome for our client.
We provided double lock up garages to the front and rear units including an independent driveway and crossover to the front unit to maximise the resale value.
The result was as predicted. The middle units will be priced at slightly less than the front and rear but overall the development will be more profitable than building only 3 units.
Approx. Gross profit: $300,200 or 16.8% return on investment. A great result!