Ozbargaining Building a Dual Living House: Anyone Got Any Suggestions? Help Me Build My Dream on a Budget of Breadcrumbs!

The Wololo Wombat on 27/05/2017 - 00:37
Last edited 27/05/2017 - 01:43 by 1 other user

So I'm a 26yo guy, getting engaged really soon and I think I've found a perfect block on land build a house and start a family.

For those In NSW and VIC, I'm not rich! I've found a block in Logan in QLD, 600m2 for under $300k. It's a little further out than from where I grew up and work, and in a suburb has a less than admirable reputation, but the reality is, the suburb next door has a great reputation (comparatively) and given the proximity to the Brisbane CBD (~20 mins if there is no traffic), and facilities etc nearby, I think it's only a few years away before it gentrifies.

Still, on a teacher's wage, I can't really afford the repayments, so the plan is to build a 'dual living' home 4 bdrms in one dwelling and 2 in the other. They share a wall but are otherwise separate and private. By living in the two bdrm and renting out the four bdrm, I can afford the repayments. Seems a lot smarter than buying an old townhouse.

I've been talking to a lot of builders. Firms like Dixon homes seem to offer the cheapest price, but I can't be certain they offer the best inclusions. Others offer a larger range but seem to have inflated prices.

So my questions are

1: What things do I need to be careful of when building?
2: Can you recommend any firms who do dual living?
3: What 'corners' can I cut to save costs (eg, doing the painting myself)
4: What is essential to negotiate before signing a contract?
5: Does anyone know what's going to happen to the QLD first home buyers grant after April 30?
6: Do you have any other ideas or suggestions that I may not have considered?

Thanks!

Home & Garden

Comments

  • Grande Kintama on 27/05/2017 - 07:44

    One question you have forgotten is will the banks even give you a loan. You say you cant make the repayments and need tennants, tennants are not a certainty so what happens if the place is vacant for 6 months.

    • The Wololo Wombat on 27/05/2017 - 09:13
      +1

      I should disclose that I made some wise investment decisions in my early 20s, and bought some cheap investment properties which now have significant equity due to capital growth and paying down the loan, while living in cheap accomodation, or back with the parents - so I have a deposit :) I ask the question about the first home owners because my girlfriend has never purchased and will be able to get the first home owners grant. We are not de-facto and do not live together so this is legal.

      My experience property investing gives me confidence that, at the right price, I can rely on tenants/95% occupancy.

      • [Deactivated] on 27/05/2017 - 12:41
        +1

        It doesn't matter if you are de facto or not for the FHOG if both of you are on the title, neither of you gets the grant. And the bank isn't going to lend against your income if you're not on the title.

        If she alone was on the title and you were de facto then even she alone could not get the FHOG. So the de facto bit is just there to make sure people don't buy properties that are really jointly owned but put them in one partners name to get around it.

        • dcep on 27/05/2017 - 21:40

          "If she alone was on the title and you were de facto then even she alone could not get the FHOG. So the de facto bit is just there to make sure people don't buy properties that are really jointly owned but put them in one partners name to get around it."

          how does the gov. find out ?

        • [Deactivated] on 28/05/2017 - 15:19

          @phunkydude: It's complicated, they may not, but if they're suspicious for any reason they can investigate (and they can do a lot to investigate). http://guides.dss.gov.au/guide-social-security-law/2/2/5/10

          Obviously in the case of both parties being on the title it doesn't even matter, you're ineligible if any parties buying the home have owed residential property before.

      • Grande Kintama on 27/05/2017 - 18:51

        A couple more thoughts for you. I'm sure you could find tenants at the right price but again it's not a sure thing and you will have to convince your lender that it is. Next problem is finding tenants that want to share a house with the landlord and still getting enough rent out of them to cover the repayments. Also correct me if i'm wrong but at a quick glance the median house price in logan is around $300,000 and your looking to spend that just on land. Add the cost of building a house to that and you'll have something that costs something in the range of sydney prices that is only worth the logan market area. Because as the old saying goes Land Appreciates and Houses Depreciate.

        • The Wololo Wombat on 28/05/2017 - 10:47

          Good advice everyone, thanks for your thoughts.

          My plan was to get her by herself on the loan. She is a 1st-year prep teacher, so convincing the banks to lend will be tricky. I was planning on getting a line of credit for my properties (or something like that) and providing the cash for a deposit. I can 110% trust her to do the right thing, even if things go bad between us, so I'm not concerned about things going awry. Parents going guarantor will mean I might be able to swindle a 5% deposit (I've done 5% before on an investment!)

          Dual Living/Auxillary Units are legal in Logan, are becoming common place so I'd expect the banks to consider this when lending to her. When this is factored in, repayments will cost just over $1000 per month, which she can afford, but it will be no means easy to get the banks to see this.

          As for the median price, Logan is really varied. Go 5 mins down the road one way and you have million dollar properties, go 5 mins the other way (central Logan) and you have <300,000. But I appreciate you pointing this out, it has made me re-consider the value. I want to buy right.

          Finger's crossed!

  • dylanando on 27/05/2017 - 08:20

    Hey Logan isn't that bad, It's starting to build up out there and Meadowbrook almost looks brand new. There's a few suburbs around there that are a bit how you doing. But Poynter70 has a good point.

    • The Wololo Wombat on 27/05/2017 - 09:17

      You are very right. I almost bought a house in meadowbrook, but got priced out by an elderly couple with a cash offer at literally the last few hours before they would've signed.

      Not to worry though, I think this strategy might prove better in the long term.

  • sk1ppy on 27/05/2017 - 08:33

    Pretty sure I've heard that after June 30 the FTBG drops by $5k. Logan is a mixed bag IMO.I live east of the Motorway and its great. Anywhere from Carbrook to Springwood. West of the motorway is where it gets dodgy but Tanah Merah/Loganholme is fine. What you're doing sounds like a great idea but like others have said it might be hard to convince the banks. Good luck tho!

    • The Wololo Wombat on 27/05/2017 - 09:19

      I grew up in Rochdale South so I totally understand! I think your views on the suburbs are spot on.

  • barbarella on 27/05/2017 - 09:08
    +1

    I would suggest starting on a smaller scale by building a smaller house - don't get yourself into debt too deeply and remember that the interest rates could rise over the years. Maybe see if you can build 2 x 2br units on the block with a strata title??? You could then rent one out and if you got into strife you could sell one.

    • The Wololo Wombat on 27/05/2017 - 09:15

      Hmm… good idea! How would I go about checking if this can be done on the block?

    • barbarella on 27/05/2017 - 20:14
      +1

      ummmm maybe start by checking with local council if it is possible to get a building permit and to subdivide the block into 2 strata titles - mind you, I'm no expert. Also, before buying a block you could check what is able to be done with the land.

  • dcep on 27/05/2017 - 13:52
    +3

    Building with project builders can be a nightmare with sleepless nights. I've contemplated before, but decided not to , after reading all those nightmares posted on whirlpool.

    But if you decide to go ahead then homeone forum is your best guide. Make sure you do your homework and read all the threads in homeone then ask your questions there before committing yourself / signing the contract.

    Primary stuffs to note :

    1) Whichever builder that you're going for, just opt for their standard design. Don't change anything, else there's bound to be variation costs down the line. Sales team will say yes to anything but the project manager will say no (that your design change has affected this and that, and this and that are extra works deemed as variations from contract)

    2) Stat all your 'wants' in black & white, including all crucial details during your correspondence with the sales team. Anything not in writing, does not count even if it was promised by the sales team. Remember, sales team will say yes to anything even if it can't be done. Later, you can't hold them responsible cause it's not in writing.
    And, your partner's 'wants' will always triumphs your 'wants', so prepare to compromise yourself for her.

    3) After signing your contract, don't even think about changing or adding anything. Eg, If later you found out an extra GPO is required in garage, they'll ask for $500 to put a single powerpoint as variation. And, they'll only give you $50 credit if you decide to reduce 1no. of lighting.

    4) Builder will milk you from provisional sum, cause they're not fixed costs. Eg, Ground condition (hardsoil / rocks encounters), footing depth, ground leveling, retaining walls. Some even charge you $500 to cart away extra site soils, else they'll just leave it there. So, make sure everything is account for including initial site clearance until final cleanup.
    Prime cost sum, expect lowest quality craps have been allowed for. Eg, crap taps, plastic crap, etc. Your partner want chrome lever tapwares of her choice? Add extra over $500 ea.
    Or you want to ozbargain hunt & supply your own fittings/fixtures? They'll give you credit $50 or something.

    5) Landscaping, driveway, fencing, not included. Expect another min. $30k for your 600m2 land. Else they'll leave it as mud land.

    6) Close 1 eye. Or close both eyes if you want to have a good sleep at night during the whole construction period. Let your partner deal with all the details since you're so trustful that you let her be the sole owner of your property. Expect some hard times with heated arguments between 2 due to stress overload and hope she doesn't leave you. This lifetime experience will test your relationship limit to the absolute max , so remember to have more sex to cool things down.

    7) Expect delays. Pray that you'll get a responsible project manager assigned for your build else you'll be dealing with devil. You might wonder why your site is still vacant even after a few months has passed. Remember to set a completion date with delay damages in your contract. Else you won't get a house to live even after 2 years or waiting. And, finally after you've moved in, remember to prepare yourself for defects list longer than a toilet paper roll. Leaky toilet/shower from upstairs, cracking driveway, wall/ceiling settlement cracks, patchy paint job, chips/marks here and there, leaky roof, freezing/burning winter or summer because some guy didn't place the insulation blanket properly above your ceiling. Let your partner to chase up gazziliions times waiting for the builder to repair all those defects again and again. Prepare to take time-offs from your work to deal with all these craps.

    8) Lastly, at any point of time you might regret that you've gone down this path and not worth all the hassles, but don't give up because you can't because giving up is not even an option. You'll just have to deal with it until it's done and tell yourself this will be the 1st and last home that you're building.
    Or, it could all be happy, carefree & smooth building process that encourages you to look forward on building your next dream house in near future. (Just like in fairy tales)

    • The Wololo Wombat on 28/05/2017 - 10:48

      Thank you so much! This is perfect and I will be re-reading this post many times when appropriate. Your response has helped me so much.

  • ziaxk87 on 27/05/2017 - 18:42
    +1

    I think you are in right direction.
    dual occupancy is best way to pay off faster
    best would be to see a design where only garage walls are shared and remaining house has a gap between walls and a fence between both. lots of people do not like sharing walls due to noise etc. on a 600m black you can do that perfectly.

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