Colin Fragar, our founder and CEO, goes through a fundamental difference between being the developer and engaging with dual occupancy builders.
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Or for those that prefer to read, here is a transcript of the video…
Colin Fragar here from Council Approval Group. Today we’re talking about one of my favorite topics… Dual Occupancies. And in particular, what you need to know before you hire a Dual Occupancy Builder.
Dual Occupancy Builders may not like me saying this, but there’s actually two ways you can build a Dual Occupancy.
Don’t Pay Retail for Dual Occupancy BuildersThe first is to go to a project home builder, they usually sell you the house and land package, which includes those two dwellings, or you can do it yourself. Now the first if you hire the dual occupancy builder is you’re effectively paying retail. Whereas if you do it yourself as the developer, you’re effectively paying wholesale. And there’s some important differences here.
I really want to lay out the importance of the decision of getting your dual occupancy built. I’m going to share with you a few notes to make it really clear.So if you’ve got a dual occupancy builder that you’re probably looking at, it depends where you are and the type of finish, but I’m even going to use conservative figures here. Say just for the move alone, excluding the land, you’re looking at $600,000 at probably $300,000 each (maybe $400,000 each) but let’s say we are looking at $600,000 for this Dual Occupancy.
Now you’re paying the dual occupancy builder their builders’ margin, you’re paying them to get the council approval, and possibly even pay them to acquire the site for you. And they are really taking ‘the first fruits’ of the development.
How to Pay Wholesale For Your Dual OccupancyThe better way is when you are the developer. You find your own site, get your development approval by seeking out the Council Approval Group.
One thing that I know is that dual occupancy builders love greenfield sites or vacant land. They also love a demolition, a knock down and rebuild project. So as soon as you have a knock down and rebuild, you’re looking at an extra at say $50,000 for the demolition, then you’ve got to rebuild it. So, as well as the builder receiving the first fruits of the development margin, if you do go with a dual occupancy builder to manager your approval it is likely that they are going to move you towards a greenfield site or a knock down rebuild.
I really want to focus your attention on you being the developer rather than you paying retail and hiring a builder from day one.
Okay, so what are the numbers? Imagine you were able to find a site that already had an existing house on it with enough land either behind or beside or even a corner lot be able to build this second dwelling as a Dual Occupancy. So, if you’re able to do that, then you’re effectively saving $300,000. Let me show you this. So if if it cost $300,000 to build the extra dwelling, and $50,000 worth of demolition costs, you’re saving $350,000 by seeking to retain the existing dwelling.
Plus, also you’re saving a whole bunch of costs because you’re effectively being the wholesale developer then you can sell on.
Our Best AdvicePlease if you haven’t already watch a lot more of our videos, we’ve probably got 20 plus videos on Dual Occupancies. But I just thought was really important to share this with you because there’s a lot of people, particularly in Australia, who go straight to the Dual Occupancy Builder without realising that they can find the site themselves. They can get the council approval and they can keep a lot of the money in the deal.
If you haven’t already, please make sure that you go to our website and get your complimentary Council Approval Magazine which goes into this in a lot more detail.
Or alternatively, if you’re ready to go, please book in with one of our consultants to talk about your project and see how we can help.