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SUBDIVISION COSTS
Paul Tooze
One of the most common mistakes made by fledging Developers is underestimating what people refer to as Subdivision Costs.
What is a Subdivision Cost?"
I always think of Subdivision Costs as being the cost for all the work required to get your separate titles issued. This work will vary from one Subdivision to the next. Some common examples of work required for separate titles are Headworks (Water Corp fees), Surveyors fees, new power dome, new sewer junction and site clearing.
And how much will the Subdivision Cost?
This is a commonly asked question and the answers you will get can vary quite dramatically. I quite often hear people mention that they have allowed $20,000 to $30,000 because somebody else has told them to. Never rely on these estimates in your calculations before choosing a site, Ill show you why. Below are some costing examples for what most people would consider to be subdivision works.
Water Corporation Headworks fee.
.$6500
Surveyors Survey Strata Fees
.. $5400
Western Powers Power Dome.
.. $1500
New Sewer Junction
$3000
Clear Site (Remove rubbish, lawn, trees, sheds etc)
.
$15000
Total
$31400
Now what about all the items that you didnt think about or werent told about?
You may need to extend the sewer main
. $13000
What if there was a pool in the backyard
. $5000
What if your council needed a constructed and drained driveway
$4000
What if you need a brick store room
..$8000
The list goes on and on. Your $31400 could now be $61400 So as you can see there is no specific amount to allow for Subdivision Costs. You need to analyze what items are required to get your titles through, allow an amount for each item, and then work out your total.
If you want to know more, and there is so much more that you need to know, take a look at the book.
Full recognition is given to Brett Taylor for this article.
