In property many ‘property experts’ preach the best way to find a great investment property is to form strong relationships with real estate agents. The theory is stay close to them and you get first dibs. In my experience, that’s rarely true. Perhaps this is because most agents (except for the very good ones) can be transient beings. OR it can be that the majority take ‘orders’ on enquiries relating to that property only and don’t often prospect far and wide.
As such in my 25+ years of property experience – it’s very seldom to have an agent ring me and say “hey I’ve got this”. Scott is that exception though it wasn’t a call offering the deal of the decade either.
The long time experienced agents who called offered what seemed like a cheap block of land but there was a catch though. It had constrained access in an unusual way.
Let me explain;
Scott was originally two existing lots, but one was constrained by a limited access easement. This was originally surveyed in the late 1800’s when horse and carts were the method of transport. Yep! So, this meant unless it was ok to park my trusted steed in the garage, access needed to be sorted. This may be the reason that the property had never been built on. This was rare for a parcel in a strong growth town.
As such the property had been on the market for a long time, along with another commercial parcel that it adjoined. So, the answer was to separate the two lots and purchase another separate lot listed for sale by another owner and widen that access point.
The fix obtained through a council Development Approval process and +12 months of design and approval allowed a revised access through sharing an entry. Also with using both lots an approval to construct three new dwellings in addition to the existing home on the property. The reason subdivision and duplexes are preferred is simple – it’s a ‘two for one’ type purchase. You get two or more houses for the price of one block of land, plus some costs. This project is now exposed to four lots of capital increase. If held cashflow is increased from four lots of rent from the homes.
I should however caution people looking to do a walk up start and try the same thing though.
You know the line ‘kids don’t try this at home’. Seriously though, just because this strategy works well here, it’s not a one size fits all solution. Especially for people looking to generate wealth from property development or property investment. This strategy can be pursed successfully by those that have the time, the expertise, the experience and the contacts to make it happen. Just be aware and have ample time and/or capital to practice and learn or get expert help where needed.
I’ve consulted with many different people about what strategies will work best for them. Often, they’re constrained by time more so than capital. So in their case – it’s usually a better move for them to simply invest in quality properties. Ones that are consistently going to provide a good solid return, rather than go through this lengthy process.
I say this because property development simply isn’t as easy as people might like you to believe.
With this property, several issues arose that made for some time-consuming headaches. Even for a team with considerable experience at getting it both right and wrong over the years. (Project Director, Engineer, Town Planner, Builder and surveyor).
One of the more frustrating odd issues wasn’t where to tie up the horses. There was a steep ‘mountain goat’ like verge out the front of the property and council conditioned a footpath to be constructed. It’s a path that comes from nowhere and leads to nowhere, but it had to be there. This created issues that increased costs and extended time frames. At one point it may have even stopped an approval. A subsequent reset of levels throughout the entire site by the Project team solved the drama. Lucky the engineers at Walsh Consulting Engineers and planners at Murray & Associates are so capable.
The next was that because the site was created so long ago, some services weren’t correctly noted on the plan. This meant potential easements on adjoining sites with separate ownership, these can get messy. Another was trying to connect to town water & sewer which didn’t have the size infrastructure that was required, water was across the street and the sewer was on someone else’s property.
Progress is still underway with the project and you can stay up-to-date with how it’s all going over on the Property Surfer YouTube channel: https://www.youtube.com/channel/UCC93rH6QHpg6Ju0LB2hv9tQ