Subdivide vs Minor dwelling??

[Keenfisho]

Hi all, I own and am currently living in a house on a 882sqm section located in Mangere East. Have pretty much just finished renovating the house and am waiting on a RV to be done. Looking to build a minor dwelling on the rear of the section and am currently trying to weigh up the pros and cons on either subdivision or just putting a md on the section. Have spoken to someone at GJ Gardiner today and they told me that in addition to building costs etc that the council also require 150-180k, she also indicated that it would only cost and additional 20k to subdivide....here in lies my dilemma. Should I go ahead will just the minor dwelling and pay the council their share or go ahead and just subdivide?

Any advice from someone that has done this before would be greatly appreciated. Any hidden costs or things to look out for?

Thanks in advance

[PukekoManukau]

Subdivide. A minor dwelling can only be 60 square metres in size and placed on a section in a single zone.

The big increase in value comes from the additional title which can be sold off separately.

[John the builder]

do the minor dwelling then subdivide. You get the rental while the paperwork is done.

[Don't believe the Hype]

why do you need to wait for subdivision in order to rent out the property? the COC comes well before the subdivision

[BlueSky]

do the minor dwelling then subdivide. You get the rental while the paperwork is done.

MDU size restricted so if building , just build as normal and then subdivide

[Beano]

Going through the number is it about
60m2 @ $3,000 build cost = $180,000
Council cost say $25,000
Landscaping/paths/driveway $5,000
Carpet and appliances etc $10,000 $230k
Rental say $400pw less additional rates,insurance and repairs/depreciation of fittings etc $15k
Net yield 6.5%

[fuzzlevalve]

Correct me if I am wrong but is there any such thing as minor dwellings anymore? You can either subdivide or under mixed urban add a second or third dwelling. Don't waste your money on subdivision if you are just after yield.

[aay]

You can still do a minor dwelling, it has to be in a single zone. Can be up to 65sqm plus garage. Will cost between 160-200k, depending on specs.

[fuzzlevalve]

Oh OK. I'd rather buy MHU then and have minimum 70sqm :-).

[chris_gee]

I suspect that your advice was reversed. !50k to subdivide 20k charges for extra unit probably water and waste connection.

[John the builder]

single house zone also allows an existing building (pre 2015) to be converted to two dwelling (but not subdivided) This means that with MD for one site you can get 3 households on one site

[Keenfisho]

Thanks for all the replies guys.. been flat out with work and trying to do research on the subject. Am currently talking to fuzo and a couple of other companies. At this stage I am mainly after yield but am still unsure of wether or not to subdivide. I don't plan on selling.. but wouldn't want to be hit with tax if I did subdivide later on and try to sell.. I understand that you currently have to own of a minimum of 10years to avoid C.G.T?

Also can anyone confirm council fees for a MD/sub? 150k sounds a bit steep for a stormwater connection?

TIA 😁

[donna]

Can you still cross lease? We too are considering adding another dwelling and we could put in a 3 bed but ideally we want to be able to have the option of selling it later on.

cheers,

Donna

[chris_gee]

It is not 150,000 for a water connection. As I said a total of about 20k for a second dwelling sounds about right since water and stormwater connections cost 13k +. Subdivision includes council contributions surveyors fees, driveway and services conveyancing fees etc. I suspect as I said either G J Gardner reversed the fees or you reversed what they said. Any surveyor should be able to guide you or confirm the figures. Some have been hit with large extra costs to enlarge the services nearby such as stormwater.
You can sell a cross-lease but at a discount vs higher costs to subdivide. You can also do a home and income where the rental will cover the extra expenditure but I am unsure how many people would have the deposit to do buy this, would want to share, or just buy as two rentals.

[chris_gee]

Watercare charges 13k maybe 15 k now for connections as a contribution to infrastructure.