WHY NOT DUAL OCC
Dual Occupancy is a great way to manufacture equity from your own home.
A home usually doubles in value every seven years in the suburbs going through normal appreciation.
But a well designed dual occupancy project could double the value in far less time. You could be enjoying lower debt, a second rental income or build a property portfolio using the equity you created in yiur own home. Or you could move into your custom designed dual occupancy home in your backyard in an area you have got used to.
There is a strong demand for dual occupancy units in suburbs well served by transport, schools and shops.
So how do you start the process? Its simple!
I did mine years ago and made enough to invest in other deelopment properties where I added value through my Architectural and Planning skills. Sure I had that advantage. But I am happy to share those secrets with you.
These are your steps to building a dual occupancy portfolio.
So where do I start in my property subdivision journey?
Here is a general check list:
Finance is your first step in any development. Don't run out of cash so do your homework and work within a cost budget
How much should you buy a development site for? Here is a simple formula.
The New Residential Zones in Victoria are complex when it comes to property subdivisions. Understand the council planning requirements for dual occupancies or triple occupancy in the area. Read council’s planning scheme and the schedules which apply. The scheme will let you know the minimum size of land you’ll need for your dual occ and what type of development is permissible. Check for overlays- especially those relating to bushfire where restrictions could occur.
Property Location is paramount for a profitable property subdivision. Infrastructure, availability of services, schools, shops, recreation spaces, employment coridors, views, cultural context and transport add value to your development.
Expert Site assessment is the foundation. Search for land that meets the dual occupancy or triple occupancy criteria. Talk to us. We know which sites work. It’s a complex exercise best left to professionals who will be with you all the way.
Size of land is important. If it’s a duplex site, you may need a minimum of 16-25 metres frontage in mid to outer suburban rings and less in the inner areas controlled by City of Melbourne, Yarra to name two. Site width for two crossovers is not encouraged by several councils who prefer to see all garages and car parkimg hidden from the street view.
Check the title, Title Plan and Planning Certificates. Check the planning certificate to see if it is in a bushfire or flood zone. You can still develop in these areas but it will add to your build costs. Check the title for covenants or agreements.
Building Cost Budget. This is very important as the builder will look at the land from a different perspective. We can assist you with the building process too and a cost budget to measure your progress is a great idea.
Run your development feasibility to ensure the project will be viable. Run one in the reverse format to work out what is the maximum amount you should pay for a site. Of course this will not apply if you are subdividing your own home or land or doing a dual occupancy in your own backyard.
You will need to find recent comparable sale prices from which you can base your end value estimate on this. Talk to agents about the current rental market and what rent could be expected to calculate the projected yield on completion. Most importantly, you need to have a good understanding of the build costs. We advise to do a Cost Budget to set your goals and control any overspending. Over capitalising or getting emotionally bound to a development could cost you in the end.
Long Settlement terms help. If buying a development site, a long settlement period helps and obtain pre-consent from the vendor to lodge a Town Planning Application pre settlement.
Town Planning and Building Permits. Once you have all the approvals, you can then go back to your lender to obtain your unconditional construction loan. As soon as this is in place, the builder can start.
Construction. The build phase for a dual occupancy should be around four months upwards and usually around eight months for a double storey to Certificate of Occupancy stage. Once the building works are completed, an occupation certificate will be issued.
Don’t forget to order a depreciation schedule; this is simple, just email the plans and builders tender and any other cost details to your quantity surveyor. Depreciations can be very attractive as long as you hold the property.