Summary: Bob Andersen, Property Development Expert, uncovers one of the most important steps in property development – the feasibility of a site. Bob talks zoning, size and frontage, amongst other gems of information valuable to any budding developer. Hi! Bob Anderson here; welcome back. Well, in the last episode we talked about Step 1, in our Six-Step process for successful property development. That was finding a site. Today, we’re going to go into more detail about Step 2 which is Due Diligence (what we call) and also the Feasibility, which in simple terms is crunching the numbers. So, we found a site but is it the right site? Are there any problems with this? Is there a reason why we shouldn’t buy? (Or) Is there a reason why we should buy it? So that’s what Step 2 is about. So, I’d just like to run through with you some of the aspects that we look at when doing the Due Diligence on the site. And, it is related also in the greats with Step 1, finding a site. So, one of the things we’re looking at is the right zoning. Now, zoning is simply something that councils, if you like, use to delineate certain uses. So you have certain land within the council area where you can only have a single house on a lot. You have certain areas where you can have maybe townhouses and apartments on a lot. You have other areas where, you know, for industrial use and so forth, for commercial use. So what we want is, we want a residential zoning where we can do, let’s say either subdivide it, or do take units, apartments or townhouses. Now, how do you find that out? Well, it’s in the town plan. You can go to the town council, you can ask the council or you can get a thing called the zoning map. Often, they are available on the internet on the website of the council, and they are often color-coded. So, in your particular council it might be for instance that the areas marked pink, are the areas that you need to look for. The pink areas, let’s say are where you can do townhouses or subdivide a lot into two. So, zoning is important. Now, another aspect would be the size. What usually happens is that with a particular zoning, comes a minimum lot size. In other words, to subdivide a lot, or to build townhouses on a lot, it has to be a minimum size, a minimum area. How do you find out all this information? It’s in the town plan – which you can read. Most town plans in fact, you can download off the council website, or you can go to the council and ask them. Also, you can engage a private town planner to brief you on all these things that you need to know. So, we’ve talked about zoning, we’ve talked about size. Quite often also there’s a minimum frontage- a minimum lot width that we need to ascertain. So, for me, they are the three initial things you need: zoning, size and frontage. I’ll give you a little example. In my part of the world where I live, we have a zoning called LMR. Now, that will be called different things with different councils and it might be called R30 if you are, you know, in Perth, or different things in different states. But, where I come from, the zoning I’m looking for is L.M.R. – Low Medium Residential. Now that means that I can put townhouses or apartments on basically. Now, that’s the zoning. The size, we have a minimum lot size there of 600 square meters. So, I need to find a size that’s at least 600 square meters with LMR zoning. Now, on top of that I need a minimum of a 15-meter width. Because, what we’re trying to do, if we’re doing townhouses, we’ve got a driveway, we’ve got some townhouses, the buildings and we have to have a courtyard. So, basically it’s very hard to work with anything less than 15 meters. So if I was to find a site, zoned let’s say, in my part of the world, zoned LMR, more than 600 (square) metres and more than 15 metres in frontage – I’m onto something. So I guess, the next thing is well, okay I know I can do townhouses, I know I can do apartments. So, is that the product I’m looking fo[...]
