Multi Unit Builders & Development in Melbourne
Melbourne will soon be home to the largest population in the country, meaning that demand for housing will continue to increase. While this brings certain challenges, it is also an opportunity for property developers and investors to capitalise on the influx of people choosing Melbourne as their living destination.
The 2017-2050 Plan for Melbourne includes higher-density living, reducing urban sprawl and connecting communities more closely to the things that matter as the State Government’s roadmap to facilitate this growth.
With planned growth comes increased development opportunities, but complex local government planning policy and legislation mean that these types of development aren’t always straightforward. So it’s critical to know what you’re doing before you dive in.
At Jem Homes, we understand multi-unit development from back to front. In this article, we’ll break down the process and explain what to do before making any decisions.
What Is A Multi-Unit Development?
Simply put, a multi-unit development is a type of development where more than one dwelling can be built on a single plot of land.
As planning regulation becomes more open to high-density living, these types of developments are becoming increasingly popular types of housing for homeowners and developers and investors alike throughout Australia.
Multi-Unit developments help facilitate property demand and higher-density living without constructing apartment-style developments to accommodate growth in urban areas.
From an investment standpoint, it is a way for investors and developers to yield higher rates of return on their investment as it essentially multiplies your investment potential as opposed to that of a single dwelling on the same plot.
As market demand for housing continues to grow, it’s likely the demand for this style of development will also continue.
Can I build multiple houses on one residential lot?
If you are thinking about building a multi-unit development, you can, but there are many things to factor into your decision. You need to make sure that a development of this kind can be done with the land you propose to develop on. If it doesn’t comply with local government planning regulations, it will be challenging.
● A minimum lot size to enable subdivision
● Private open space
● Minimum setbacks
● Privacy and shading
● Stormwater
● Existing services
● Encumbrances
The most important thing you can do is do your research upfront. Then speak to an experienced builder like JEM Homes, who will be able to steer you through all aspects of the development process.
The key steps to successful property development
When embarking on a multi-unit development, there are several steps to take to make sure you are following the process correctly, but also to ensure that you maximise your chances of a successful outcome. These include:
Site Identification and Feasibility
First, identify the site where you want to build. Remember though that your ideal site may not always be the right site to build on according to planning regulations, so it’s best to check this well in advance.
Make sure that the site has the right orientation and is free from encumbrance or trees of significance as these can create delays in the project as well as add to your costs.
When it comes to feasibility, it is important to remove the emotion from the situation. While your ideal site may trigger certain emotions and feelings, it is an investment, and as an investment, it’s important to consider whether the development is feasible from a bottom-line profit perspective. If it is, then it’s a green light, and if not, it might be best to look for another ideal site where you can maximise your investment potential.
Zoning
Some multi-unit developments in Melbourne will be allowed in residential-zoned areas and other areas may be off-limits.
When researching where you would like to develop, dig a little deeper into the zoning regulations as they will dictate what you can and cannot do in the area. You can find out more information by speaking to your local government planning official who will be able to advise on the zoning requirements.
Financing and other costs
Financing is important. If you have the upfront capital to fund your project, then it will be a much smoother process, otherwise, you will require finance which adds certain challenges.
Obtaining finance for development is different to obtaining finance for a standard owner-occupied or investment loan. It’s best to shop around for a broker or lender who specialises in multi-unit development, as they may be able to assist with your financing needs.
Other costs and fees that go into your project will need to be considered from planning and building approval fees, conveyancing, marketing, real estate costs and so on.
Advantages of Multi-Unit Development
A multi-unit development can be a great investment opportunity if it is executed correctly. This is why it is important to have a good builder in your corner who can help you navigate the process. After all, if you are an investor, you want to maximise your return at the end so it’s best to make sure the sums stack up in your favour.
Given the demand for property in Melbourne, a multi-unit development also has its advantages as you will be able to increase your profitability on your investment compared to a single dwelling home on the same block of land.
To make sure you benefit from your investment, it is crucial to understand this at the feasibility phase of your project so you can understand the estimated projections on your investment well in advance of starting the project.
Ready to take the next step?
While there are several things to consider and research before you dive into a multi-unit development, you don’t need to do it alone. First, do your research on similar types of development and have a baseline idea of what you would like to do. Remember, information is power!
When you’re ready to start the conversation, at Jem Homes, we’re experts at multi-unit developments in Melbourne. Ask us how we can help you and your investment!