Tips to Prepare for Your Multi-Unit Development Project
As our urban spaces have become more densely populated, our homes have become smaller. This prompted many land owners and building developers to subdivide land holdings and build multiple dwellings where traditionally, there was only a sole single-storey or dual-story residence. Multi-unit developments, in particular, have proven to yield impressive investment returns in the Melbourne region, increasing the model's popularity among building developers and property investors.
So, what is a multi-unit development, and what are the benefits of investing in multi-dwelling projects? Read on to learn more.
What is multi-unit development?
A multi-unit development often refers to a range of constructions that offer two or more dwellings on one land title. This can be performed on a newly released land title or on an existing property that is restructured to fit more residences.
Subdivision
The act of subdividing land usually entails acquiring an existing commercial or residential property, demolishing the existing structure, generating a new set of titles and creating several new dwellings within the boundaries of the same space.
Units
Units usually consist of several independent single-storey dwellings with a common driveway. These are popular investment developments as single-story dwellings typically cost less to build than multi-storey dwellings or apartment blocks.
Duplex
A duplex is often a two-unit dwelling that shares a central wall. Sometimes, a duplex is created out of a larger house divided into two, with a fence that provides the occupants with separate yards.
Triplex
Triplex developments generally consist of three adjoining residences on a street frontage that shares a common driveway. These dwellings can be one or more stories depending on the guidelines set by the local council.
Townhouse
Townhouses generally have two or more stories to optimise the dwelling space within the confines of the property—a popular design for smaller blocks. Though these types of developments usually involve two to three properties, bigger developments do occur.
Apartment buildings
Apartment blocks generally contain multiple dwellings configured throughout a multi-storey construction, with shared yard space, driveways, and sometimes, facilities like laundries.
The advantages of multi-unit developments in Melbourne
Investing in multi-unit developments can yield more benefits than a single house on a block of land. Read on for more info.
A predictable rise in asset value
Multi-unit development investors who focus on multi-family rental properties have seen some of the best returns in Melbourne's real estate investment sector, with the property's value rising significantly faster and more consistently than traditional single-dwelling properties.
Effective and timely development of a real-estate portfolio
Having a multi-residential investment in your real estate portfolio can provide you with better returns from multiple sources within the same block of land.
These types of assets can be used to improve your taxable income status and give you leverage with bank loans to use for other investments, significantly improving your general finances and investment opportunities.
Additional income source
While owning your own home is a great asset, it only makes you money once you choose to sell it; in fact, it costs you significantly.
Well-planned and strategised multi-residential developments provide you with more income than it costs to make the repayments and maintain the property, creating a reliable source of income that can protect you if your main source of income is compromised.
Financial benefits
It is common knowledge that real estate is one of the most solid investments someone can make; however, several financial benefits make multi-unit properties a smart asset.
Interest
With investment properties, you can make tax deductions on the interest you pay on your loan repayments, which is greatly beneficial when interest rates are high.
Expenses
Because rental properties are a financial investment rather than just a personal asset, you can claim costs associated with those properties, including:
● Tenant advertising
● Property depreciation
● Body corporate and strata fees
● Council rates
● Water rates
● Land taxes
● Accounting fees
● Cleaning, maintenance and repairs
● Trade hire
● Agent fees
● and much more
If you have a property you plan to self-maintain, you can also claim the travel costs, tools and materials you use throughout the fiscal year.
Building your multi-unit development
A significant difference between building a home or investing in single-dwelling properties is getting approvals for the building project, as it entails more complex specifications and parameters.
There are many things that a council, drafters and trade professionals must take into consideration with a multi-residential property. Some examples include, but are not limited to:
● Property safety features
● Effects on surrounding properties
● Fire safety features
● Shared utilities
● Emergency egress and access
● Car spaces
● Privacy between each property and neighbours
● The slope of the land
● Plumbing and sewerage
● and much more
These varying factors mean that your multi-unit investment will be more challenging to execute than a typical property build.
However, if you choose a multi-unit development builder in western Melbourne with a proven track record for well-executed, streamlined, successful building projects, like our Jem Homes development team, you should ensure a smooth process.
If you are developing in another state or country, then here are some aspects of a build your builder should be providing:
● Assistance with council planning approval and building permits
● A clear project pathway with a reasonably solid completion date
● Proof of previously completed projects
● Full business registration and insurance
● Transparency
● Good feasibility assessments
● Turnkey building models
While there are many good builders out there with sterling reputations, it is worth conducting extensive research and gaining plenty of independent knowledge in the multi-unit dwelling process.
Knowledge is power, so arming yourself with as much information as possible before looking for a builder will give you more influence and leverage in the decision-making process. A firm knowledge of your local area's approval and build process will also help ensure your project is completed at a price appropriate for the current real estate climate.
Jem Homes: A multi-unit builder with a reputation for excellence
Company founders and operators Connie and James Giordano are passionate about turning their client's dream builds into a reality, offering transparent, customer-focused design and building processes for a range of project types, including:
● Duplex units
● Townhouses
● Subdivisions
● Knock-down rebuilds
● New builds
● and more
For more information about building with our Jem Homes team, contact us today at 0423 044 467 or send your contact details and inquiry via our online contact form, and one of our representatives will respond promptly.