I have noted a number of roadside planning application notices over the last few years where I live detailing the intent to demolish existing single family homes & replace them with between 3 to 8 apartments. The original house is often an old bungalow (probate houses I'd say) in town or suburbs with a sizeable garden attached that lends itself well to a sufficent footprint for apartments.
I find it interesting that One could convert a single house into several & yield multiples of sale price / rental price. The names on the planning notices are in some cases local businesses that I recognise & in some cases they are what appear to be private individuals that are going down the development route.
In terms of a private individual embarking on this I wonder if the effort is worth the potential pay off. It's a relative question of course but the potential upside is big in my mind.
Thoughts on the approach & sequence:
I find it interesting that One could convert a single house into several & yield multiples of sale price / rental price. The names on the planning notices are in some cases local businesses that I recognise & in some cases they are what appear to be private individuals that are going down the development route.
In terms of a private individual embarking on this I wonder if the effort is worth the potential pay off. It's a relative question of course but the potential upside is big in my mind.
Thoughts on the approach & sequence:
- Assume the existing site / house (PPR) is owned by the budding developer.
- Run cost benefit analysis. Assume acceptable findings.
- Run risk assessment. Assume acceptable findings.
- Understand the local development plan & planning zone & associated restrictions for the site in question.
- Survey site & draft plans for planning application. Submit planning application (in the name of your Development Company?). Field objections & revisions. Secure planning permission.
- Secure purchase funding & development funding for the Development Company.
- Sell the existing site / house to your own company that will be developing the property. Presumably the property value will be elevated if it comes with FPP approved, right?
- Engage builder for mgmt. & execution of the build. Straight payment for T&M (preferred) or perhaps a stake in the development as payment.
- Complete build & sign off.
- Sell or rent the units unfurnished.
- Woud you do it?
- Why?
- Why not?