Turn-Key Investment Opportunity - Dual Splitter Block

INVESTMENT OVERVIEW (by Adam Hardy of Hardy Boutique Homes)

56 - 58 Thynne Road, Morningside, Queensland, represents the opportunity for investors to purchase 2 x freehold splitter blocks, now with pre approved Duplex Style home designs with the following key attributes:

  • Residential ‘A’ zoned circa 420 m2 rear block subdivision blocks

  • Bus at door and extensive local shops / cafes and train a mere 150-350 metres walk.

  • Each block sub-dividable into 205 > 210 m2 of freehold land title, with pre approved duplex style house designs.

  • Each design consists of 4 x bed 2 x living areas, (total 210-220 m2 home), plus yard / courtyard patio areas of 60 m2 to 100 m2. Separate and quite unique "Hamptons" inspired home designs available.

  • The greenscape continues beyond the rear yards as surrounding neighbours homes are stepped back with green landscaping and pools surrounding creating a home like feel unlike apartments or town homes.

  • The homes at rear and sides are similar 'older' Hamptons style homes that are protected under Character Heritage legislation. New construction at rear is approved with houses setback 10-20m from rear boundary creating a natural corridor of space.

KEY ADVANTAGES OF BOUTIQUE HOMES

FREEHOLD TITLE – DA approved with most services already in place from street to obtain the new titles. Duplex style construction then 200 > 210 m2 blocks subdivided out into individual titles at Frame Stage of construction.

GREENSCAPE REAR YARDS – Landscaping and rear neighbour setbacks create a green corridor unlike many Medium Density properties in the area.

RESIDENTIAL FINANCING AVAILABLE – Project can be funded GST inclusive under duplex style or traditional house and land finance facility, thus negating the need to pay commercial finance rates.

Result = Instant / Immediate Equity Gain

LIKELY TAX ADVANTAGES – Under current state and federal property laws splitter / duplex style property investments can be deemed to be individual property investment holdings, meaning Stamp Duty and Capital Gains Tax exemptions may apply.

Overall aim - Equity may thus be obtained under low capital gain tax & transfer duty concessions.

NUMBERS – VALUE UPON COMPLETION

End value of each home, according to recent agents appraisals, and based on real comparable sales in the immediate area;

  • $850,000 for Home 1 (middle home smaller back yard).

  • $900,000 for Home 2 (end home with larger back yard).

Recent sales of similar homes supporting sales data. Sales within the last 24 months.

RESALE $890,000 - (sold September 2017) - 33 Dickson St, Morningside.

2 years old, comprising; 4 x bedroom, (freehold title), Town home.

Agent comment: Slightly superior location, equivalent size, slightly inferior yard and finishes. On balance equivalent.

RESALE $890,000 - 8 Palermo St, Morningside

Comprising; 210 m2, 3 x bedroom, plus 2 x living area home, (freehold title).

Agent comment: Inferior location in the suburb similar size and finish of home.

NEW $950,000 to $1,050,000 – Sixth Ave, Balmoral

Terrace homes, 4 x bedroom, 2 x bathroom, 2 x car garage, second living area, (freehold title).

Note: (3 of 5 currently 'sold off the plan', prior to completion of construction).

Agent comment: Superior location, Inferior in size and yard space.

NEW $840,000 - 25 Penbroke Rd, Coorparoo

Body corporate town home, (closest comparison to current project).

Hamptons style town homes on body corporate titles comprising; 3 x bedroom, 2 x bathroom + yard

Agent comment: Similar standard of location and finishes, inferior in size and body corporate applies to most homes therefore INFERIOR in most aspects.

RESIDUAL DWELLING U/Contract at $1,200,000 - 25 Penbroke Rd, Coorparoo

Freehold home being, (existing), property from current town home project.

NEW U/Contract in the range > $780,000 to $800,000 sale price - Grayson St, Morningside

Town home comprising; 3 x bedroom, 3 x storey modern, freehold title, on 210 m2 land.

Note: One block from current project but slightly smaller in floor area.

Agent comment: Slightly superior location, Inferior in size and yard.

Summary of Costs to Complete

Land prior to split (purchase 410 > 420 m2 block)

Build and Subdivide into 210 m2 blocks x 2

Land purchase price (including most services $699,999).

Estimated Construction Costs.

$295,000 x 2 homes TURN KEY

Cost Includes;

- Luxury fit-out included ($23-28,000 upgrades per home)

- Ducted A/C

- Timber floors

- Luxury kitchens / bathroom – ILVE / SMEG or European appliances

- Extensive landscaping / bamboo / lily pili hedging etc.

- Luxury BBQ area to rear patios

- High ceilings – Feature Timber mouldings

- Roof lines / Gable infills / Stacker / French Doors

- Extra Earthwork / Gas connections. (largely paid for by previous developer).

Estimated Stamp Duty and Headworks and Final Survey sealing / Title Fee(s) costs during Subdivision (one only claim exemptions under private ruling with tax department or similar) - $55,000 > $60,000

Estimated Interest cost during construction and bank fees - $50,000

(Based on av. loan drawn at 70% of total cost during construction, plus small building contingency).

Sub Total Costs Estimate: $1,400,000

Note: Hardy Boutique Properties Management Fees (as advised):

Buyers Agent Fees - $29,990.

Project Management through to completion - $TBC.

VALUE UPON COMPLETION: $1,700,000 - $1,780,000

EST. EQUITY GAIN APPROX $ 300,000 (i.e. $150,000 per Duplex home)

Disclaimer: This project and any associated financial estimates as contained within this summary, are based on information provided by client to Viking Capital Group and as such Viking Capital Group does not represent client figures to necessarily be 100% accurate in all circumstances. In property development activities variations in the estimated costs and/or re-sales values may occur depending on a variety of issues, including developer competence, costs of funds, building costs, prevailing property market conditions and current federal tax laws and/or state stamp duty rulings. Viking Capital Group therefore encourages all potential investors to obtain suitable financial and/or legal advice before proceeding with any proposed investment opportunity, joint venture partnership scenario or project 'buy-out', as outlined above, and within our web-site from time to time.

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