When I first thought about becoming a property developer I had this pre-conceived idea that a nice 6 unit site would be a good starter. Couldn't be too hard could it. They seemed to be going up everywhere. After I first got involved in a program that taught the ins and outs of property developing it soon dawned on me how much is involved in any development and what sort of funds are required to complete the different types of developments. One of the biggest factors when starting out in the developing game is how much risk are you able to handle? It's an interesting question because what may be high risk for one person may be low risk for another person. It all depends on a number of factors including experience, mindset, resources and ambition just to name a few.
In my opinion a dual occupancy development is the perfect starter if you are new to the property developing game. It is by far the safest of the development projects because your site always maintains a high proportion of its value due to the fact the existing house does not get demolished. Like any development certain criteria must be met so for many parts of the project the procedure and process are the same as with bigger sites. The zoning must be right and this doesn't just mean that any zone where developing is permitted means a dual occupancy development will be right. If the area is zoned more towards a higher density then council will not allow you to under-develop the site. You would find other developers out bidding you at auction or making much higher offers to the selling agent as higher density numbers will support their offer. The best way to tell if a potential site is best suited to a dual occupancy development is to look at any other developments that have been completed in the area and preferably in the recent past. If the area has several properties that have been subdivided into two lots with the existing house still standing and a new dwelling constructed at either the front or rear of the property then the area you are looking in will probably be suitable. Your due diligence will of course include researching services and being familiar with local requirements such as set backs, easements and overlays. Covenants are also applicable and some can only be found on the vendors statement such as the single dwelling covenant that exists on some properties. Vegetation, Heritage, Flooding and Culturally sensitive overlays will affect any site. A simple dual occupancy one is no different
Things to check when assessing a site concern the existing dwelling. Many dual occupancy sites work because your construction costs are kept down due to the fact you are only building one dwelling but in the end you own two. You are really just trying to pick up the backyard for as cheap as possible and in some circumstances when values are on the rise you may even end up getting the backyard for free or even better you get paid to acquire the backyard. How does that work? Well it only happens in a rising market but if the existing dwelling once subdivided is worth more than what you originally paid for the whole property then you have in reality been paid to develop the backyard. On the other side of the equation is that the existing dwelling must support a subdivision. If the dwelling is located too close to the boundary fence on either side then you won't get the required clearance for the new dwellings driveway to be constructed. Not unless you want to chop off some of the existing dwelling and you need to be aware of the associated costs of doing that. Those costs don't just involve the cost of removing external walls etc but also how much does that alteration change the value of the existing dwelling. If you lose part of a living area and a bedroom it will dramatically reduce the end value of the existing dwelling.
If the clearance down one side of the existing dwelling is adequate for a shared driveway or even better it is wide enough to create a private driveway for the new dwelling you have to consider where the existing dwellings car parking area will be located. If you have enough space for a private driveway for the new dwelling then chances are the existing dwellings parking won't change too much but if you have to create a shared driveway then the existing dwellings parking will most likely need to be relocated at the rear of the dwelling and this is the backyard you want to build a new dwelling on. There will need to be enough space for both.
...to be continued