PETER'S PROPERTY DEVELOPMENTS
ESPLANADE, PORT NOARLUNGA SOUTH, SA
Peter purchased this property for $675,000. It was advertised at $625,000 to $675,000 and as you can see, he paid at the top end of the asking price range. Why? I’m glad you asked!
Most people considered this property to be a two unit site development. The size of the land meant that you could fit three units on the site but as the real estate agent didn’t include the frontage in the ad, people assumed that it was just a standard rectangular block with a frontage of about 18 metres.
However, Peter did his homework and could see that the rear boundary was 14 metres wide but the front boundary was over 24 metres wide. When it comes to development potential, most councils are not concerned with the width of the rear boundary; they are mainly concerned with the width of the front boundary and the area of the land.
Having such wide frontage in this particular zoning meant that Peter had enough land AND frontage for three units so he bought the property straight away!
Peter built three townhouses and has kept them all as rental properties. Due to the current low interest rates, depreciation benefits and the relatively low price paid on a per block basis, they are all currently positively geared.
Kudos to the builder as this was a very difficult build. If you have a look at the plans you will see that due to the shape of the block and Peter’s aim to maximise the size of the dwellings, there are hardly any right angle angles corners in the buildings – a very difficult build indeed!
SHEPHERD ROAD, CHRISTIES BEACH, SA
This 680 sqm corner property was on the market for a while and Peter thought that this was a bit strange as it was a corner site and it had good development potential.
If you look at the plans which include the original house, you will see that the home is positioned in such a way that there is a reasonable amount of land in the backyard where you could retain the existing house, cut off the backyard and sell it separately. When Peter checked the development plan, he could see that based on its zoning, the backyard was large enough to subdivide but apparently the block was not wide enough. At the time, the minimum frontage for an allotment was 9 metres and if you did cut off this block, it would only be about 8 metres wide.
However, Peter knew that there was a way to be able to get a block of land approved with only an 8 metre frontage so he bought it!
Peter did this development in two stages. Stage 1 was to retain the existing house and subdivide the block at the rear and sell it.
Stage 2 was to build three townhouses on the remaining land. Peter demolished the existing house and built three townhouses. The original idea was to build and keep these townhouses but then Peter found the site on the Esplanade at Port Noarlunga South and decided to build and keep there as the Esplanade is a much better location in regards to capital growth potential.
Peter eventually sold all three Shepherd Road townhouses and still holds the three townhouses on the Esplanade as long term investment properties.
PETERSEN CRESCENT, PORT NOARLUNGA, SA
Peter bought this awkward shaped block of 860 sqm the day after the auction. (There is a great story behind this purchase but rather than take up space here, Peter can tell you all about in class!). There were no bidders at the auction as the shape of the block put off developers and the poor condition of the house put off home buyers. Peter was able to negotiate the purchase of the property early the next morning, before his first class of the day!
Peter is a strong believer in that the value in real estate is in the land. In other words, you make your money from the land, rather than the building. As Peter had no intention of building and keeping these properties, his goal was just to subdivide the land and sell each block.
Peter could see how a triangular shaped block would deter many people but he saw some opportunities. If you look at the plans, you will see that the blocks of land that Dwellings A and B are sited on, are almost rectangular. Except for the angled rear boundaries, they are both quite regular in shape.
However, Dwelling C is sited on a triangular block and this brought with it some problems but also a benefit. The main problems were that due to the shape of the block, Peter could not maximise the site coverage of the dwelling and the backyard was not a regular shape. However, the benefit was that because this block of land was very wide, it was easy to include a double garage in the design of the house. (Double garages are very appealing to both buyers and renters).
In summary, Peter demolished the house, created three new allotments and sold them all, without building. This particular project has been one of his most profitable, in percentage terms. Why? Because he focused on the most valuable component in real estate, the land. As Peter will tell you himself, these projects where you just subdivide the land and sell are gold but they are very hard to find!