Auckland Terrace Housing and Apartment subdivision

[Jeff01]

I have gone through the forum and seen previous comments about not being able to subdivide something in the Terrace Housing and Apartment zone unless it will be 1200m or larger. I understand that the purpose of this rule is to encourage people to fill in the land with high density units/apartments. We have a couple of properties on the radar which are in the 600-800m range zoned for terrace/apartment although the suburbs that they are in probably won't be ready for that level of infill for another decade or two. We can purchase them for the same price as mixed housing suburban.

Has anyone successfully made a case to the council to split a smaller section in to two to put a second house on the back within this zoning?

[AlexL]

I have heard from a few people who have said that whilst this was the case a little while ago, there was a court decision? which ruled council could not legally prevent properties being subdivided in to smaller sections to build a building/house on provided they met all the other requirements.

[GLin]

Development is not just about the size of the section.

You need to consult a specialist architect and planner who knows their stuff in terrace and apartment development.

Things to consider:
1) zoning
2) underground services (and their positioning)
3) flood zone, or not
4) height relation to boundary (this is by far the biggest limitation)
5) driveway width if it's a back section
6) outlook areas
7) parking
building coverage
9) impermeable area

Then there is a massive issue, finance.

Development finance is a lot different than just buying the property/land.

Here's one of examples of small scale development that I prefer with my students:

[BlueSky]

Which suburb?

No money down?

[Jeff01]

Alex and Gary, thanks for the great info. We have consulted a town planner and recently bought something that looks suitable.

[elguapo]

Gary, good on you providing the details. This is a strategy I've done a number of times, however I'm confused how you get a $500,000 equity gain. How have you calculated this?

Your taking an existing 3 bed/2 bath property and converting into a total of 8 bedrooms/4 bathrooms together with all the required works and compliance costs to get there. Your claim this is a 'no money down' deal, yet the costs to get to that completed project are going to be considerable. Who has supplied the finance and at what rate?

[GLin]

Cap rate

No money down requires capital upfront, just like normal buy and hold, buy under value, add value, top up.

[elguapo]

No money down requires capital upfront

Ah. That's not a no money down deal in the property sprukers world.

buy under value

Was this an under value buy? $790,000 seems bang on for the current market. Given you consistent recommendation to by at 20% less than market, what when wrong here?

add value

Yeap, but this also required capital. Turning 200m2 into 3 properties, 8 bedrooms and 4 bathrooms is going to have a cost. That doesn't increase the equity.

Cap rate

That does not translate into equity. The cost of that conversion should come off the 'equity gained', it's the very definition of equity.

[Davo36]

Ah. That's not a no money down deal in the property sprukers world.



Was this an under value buy? $790,000 seems bang on for the current market. Given you consistent recommendation to by at 20% less than market, what when wrong here?



Yeap, but this also required capital. Turning 200m2 into 3 properties, 8 bedrooms and 4 bathrooms is going to have a cost. That doesn't increase the equity.



That does not translate into equity. The cost of that conversion should come off the 'equity gained', it's the very definition of equity.

You and your difficult questions mate.

[elguapo]

You and your difficult questions mate.

Only a little difficult. Credit to him for posting a real property. I actually think it's (mostly) a good buy and is a decent base for a multi income property. Can't see getting a total of 8 bedrooms and 4 bathrooms into ~200m2 without it downgrading the feel significantly, but each to their own.