House And Land Packages – Are They A Good Idea?

You often see house and land packages advertised and they may have an attractive price . . . . . but are they a good idea?

Here are a few more things to think about:

  1. These sort of deals are popular with property investors who just want to get a new house built and get tenants in as quickly as possible. . . Wouldn’t you prefer to have the houses next door owned by occupiers who are going to be more likely to care about the appearance of the house and garden than a tenant who has little interest.
  2. It seems to me they are usually offered on the hard to sell and the least attractive blocks which is one reason why they are cheaper. Typical problems I have seen include:
        • On a major road
        • Poor orientation
        • Be an odd shape
        • Have access issues.
  3. They are often based on the smallest possible block that will fit the house. Often they will have the houses so close together they will look more like a terrace and the back yard will be minimal.

One of the Real Estate maximums is that the way to make money on a house is by buying the right house.

Make sure you don’t harm your chances of a good future sale by buying a bad House and Land Package.

Much more advice in the   anewhouse – Guide to Buying a Block   for only $2

For similar posts on buying land see the Blocks section

 

Country Or City

It’s not as simple as Country or City, there are a lot of areas in between.

In the country it can be sea change, tree change, a rural block, or in a small town.

In the city it can be inner suburb, existing outer suburb, or new subdivision.

To some extent it depends on your time of life.

Country Experiences

When we were younger we were happy living in a rural town.

Running kids to sport and going to social events etc was all fairly easy as everything was no more than 2 -3km from home.

I could cycle home for lunch in 10 minutes. We could even drive for 50km,or more, without seeing a traffic light.

A friend of mine lived out on a rural block because he said he knew what his teenage kids were up to because they relied on him for rides.

Even so he was still only or six minutes drive into town.

City Experiences

Since we passed 50 we see real advantages of living closer to the city.

Good public transport means we only need one car

As you get older the risk of having an illness needing a stay in a city hospital gets higher and how would we manage if living in the country.

We support a Melbourne based football team (the Mighty Saints) and try to get to most matches.

A 70km round trip from the suburbs is better than a 450 +km one which we did for a number of years.

Did you go for the country lifestyle?

See similar posts see Choosing a Block

 

7 Things To Think About Standing On A Block

So you have visited the Developers Office and been shown a site plan with some blocks for sale that are the Size, and Orientation, you want.

The next thing is to get a copy of the Title Plan and go and look at the blocks you think may be OK.

Here are some things to think about.

  • Find the Boundary Pegs Normally the actual boundary peg will be driven in so the top is at ground level, there is normally a tall peg next to it to help locate it. Once you have found the pegs you know the piece of land you are thinking about buying.
  • Manholes Sewers and Drains A lot of blocks have Easements for sewers and drains which will restrict how much of the site you can build on. (The Title Plan will show the Easements) If you can see a manhole you will also need to think about how this might limit what you can do in the garden.
  • Site Slope As little as a 1m slope from front to back can add $3-4,000 to your site cost. A 1m slope from one side to the other can add even more. The steeper the slopes the more the builder will charge for site costs.
  • Below or Above the Road Where there is a sloping development site some blocks will be above the road and others below. Sites above the road are less likely to flood and can be more private than ones below the road.
  • Effect of Building on Neighbouring Blocks. Shading and blocking views are common problems that can affect your proposed house and garden. If you are keen on building a solar pasive house you can minimise the effect if the block you choose is higher than the one to the north. Obviously if the surrounding blocks are already developed its easier to consider the effects.
  • Road Crossover Many blocks now come with a driveway crossover if this doesn’t suit your design it will cost quite a bit to get it changed.
  • Look Up One thing I didn’t notice on my first visit to my current block was the overhead power cables just outside the block. They aren’t big pylons or anything and the poles are some distance away so its just a single cable. It does however restrict the size of tree we can have in our garden.

 

You will be very lucky if you get a perfect block so you are probably going to compromise on some of the above points. Good Luck!

 

Also see Choosing Blocks

 

Community Title

Community Title Developments include;

  • Gated Communities,
  • Retirement Villages,
  • Eco Retreats,
  • Golf Course developments,
  • Marinas.

A Community Title it is basically the same as a Strata Title that would be used for a block of apartments.

These developments can look great……..but what are the issues of having a new house on these developments?

Body Corporate

Buy a house or block of land in a community title development and you immediately become a member of the community or neighbourhood association (body corporate), bound by its bylaws, and also the co-owner of the shared property.

Often schemes are subdivided into separate stages. . . .So the stage for your new house may have its own body corporate in a neighbourhood scheme, but this will be under an overall community scheme.

By-laws

Bylaws can include:

  • What you can put in your garden.
  • What pets you can have.
  • The appearance of your property (including acceptable colours).
  • Who can live in the property, which can make properties difficult to sell.
  • Not allowing washing hung out.

Facilities

Facilities can include; streets, pavements, parks, a “village green”, clubhouse, pool, tennis courts, etc.

However these “exclusive” facilities have to paid for and maintained, unlike the public facilities in a conventional development which are paid for by the council.

The extent and quality of construction of some of the facilities, for example road construction can sometimes be below the standards required by councils who insist on minimum standards for roads they know they will be responsible for!

Another typical problem is a lack of space for parking particulaly if residents don’t use their garages.

Costs

In addition to the cost of maintaining the facilities,you will be hit by body corporate management fees.

In some cases two fees; for your neighbourhood, and then for the overall community.

Its worth remembering that there is no saving on rates as these will still need to be paid.

I’m not saying don’t buy a block on a community title, just understand what it means.

For posts on issues to consider when buying land see Blocks

 

Title Delays

Do you think because you have paid a deposit on a block you can settle on the land straight away?

Waiting up to a year could be a possibility!

The Developer’s on site agent will usually be pushing the latest land release but this is the most likely to have the longest wait until settlement.

Some options to minimise delays

  1. Don’t look at blocks that are yet to be fully approved. Although a development will get an overall approval before blocks will go on sale the actual stage with the blocks is likely to need a separate approval. If there are environmental issues such as rare plants, rare animals or aboriginal heritage issues this can hold up the process for months.
  2. Whenever possible only look at blocks where the roads are already in place and the blocks pegged. Construction of roads and services can take 3-4 months, longer if its bad weather.
  3. An Alternative to developers land offices. See if any estate agents have single blocks for sale. These might be blocks where the sale has fallen through, or have been sold and the owners situation has changed meaning they can no longer build on the block.

It may suit you to have a delayed settlement if you are not in a rush to build. . . .but most people, myself included, are usually keen for an early start.

Last time I went the option of the a block where the sale had fallen through and got a much better block than the ones that were available in the latest release.

 

How long have did you have to wait for settlement on your block?

For posts on issues to consider when buying land see Blocks

 

Sub-Divided Block Issues

Want to build a new house in an established suburb?

One way is to look for a subdivided block, or even buy a house on a big block and sub-divide yourself.

I see quite a lot of large suburban blocks sub-divided with one, or more, house blocksadded.

In a number of cases the original house the original house is demolished and 3 houses are built on the block.

If you want to build the available block will normally at the rear known as a Battle Axe Block

So what do you need to think about when considering a subdivided blocks?

Here are some issues to consider:

Vehicle Access

Any shared vehicle access can be a cause of contention so a separate driveway is much the preferred option.

If you have the rear block and put a gate near the front this can provide extra play space for young children. That can be very useful as the backyard area will be fairly limited.

Adequate Off-Street Parking

With two properties sharing one frontage and the loss of parking if there are two crossovers On-Street parking will be at a premium.

I would recommend having space for at least two vehicles off the street (this can include the garage)

Privacy

When you are squeezing a house on a small block windows are going to be closer to your neighbours on all sides, so overlooking, and being overlooked, is a potential issue.

Orientation

A South facing block with living rooms to the rear (North) is going to give the best results if you are looking for a passive solar house to minimise heating and cooling costs.

Costs

For a rear block you could be hit with extra costs for:

  • 15m plus driveway construction.
  • Extra utility costs due to distance from existing services.
  • Builders charging a restricted access fee in addition to the typical/normal advertised price.

Sewer and Drainage Easements

Easements are often run along the back fence of the original block.

A typical 2-3m easement can severely limit what you can build on the block, particularly when you might also have an easement to service the front block running through your block.

I have heard of sewer lines on subdivided blocks running down the middle of the block, so its important you check this before you buy!

Planning

As part of arranging the subdivision the sub-divider will often get planning approval for a type of house.

If that’s not what you want make sure you get the owners written agreement to the design you offer to buy.

It might even be worth making an offer subject to planning permission.

 

As I haven’t personally built on a subdivided block I may have have missed an issue you have experienced. If you think so why not leave a comment?

To better understand what you can build see Restrictions in the Blocks section

 

Beware of Blocks Below The Road

On a summers day, during a period of dry weather, I came across these recently built houses with lines of sandbags!

You would think that the houses must have fronted a river!

Not much chance of getting a car in the garage!

So. . . . What’s the story?

Well its in a long established suburb where large blocks are being subdivided.

That means the drains, which were designed for an estate with lots of gardens, are now in an area where all the water quickly runs of the roofs.

Any heavy rain and the drains become overloaded and then water starts pooling on the road

Well the houses are built facing a low part of the street, so it doesn’t take long for the water level to rise to the footpath level and then start flowing down the driveways.

What makes it even worse is cars driving through the flood water and creating a wash!

For more unusual  house pictures go to  What the………………….?

Covenant Removal

A previous post talked about restrictions placed on block by covenants

So you have found the perfect block. . . but it has a covenant restricting the amount of buildings to 50% and your dream plan will occupy more?

Removal of covenants can be tricky and it may be best to talk with a lawyer experienced in planning matters.

Typical process.

  1. Have a walk around the area to see if any other blocks have been changed which may be a precedent you can use.
  2. Be realistic about how much you want to change the restriction If the restriction is 50% then 60% development may be achievable. More than that and you are likely to get objections.
  3. Talk with the immediate neighbours to see if they feel your proposals are reasonable, as they are the most likely to have objections. They are more likely to object if they feel their amenity is lost. ( for example their sunny backyard is shaded by a large double storey building occupying most of the lot)
  4. Put in a planning permit to the council to change the covenant which will involve a fee. Make sure you put in as much detail as possible including any precedents in the area where other lots have been developed without any detriment to the area.
  5. The council will mail out to everyone that may be affected or who also has the same restriction on their title. Typically all the estate can be considered “beneficiaries” of the covenant as they either all have the covenant or benefit from it in some way.
  6. Wait a month to see if anyone objects. If anyone does object (inside that 28 day period), they have to put that in writing and advise why they object. The objection has to show why the “amenity” of their property (value, enjoyment and aesthetics) would be harmed by lifting the covenant.
  7. The town planners will consider whether your proposal really affects the neighborhood, and if they would normally approve the development. If there have been any objections, these will be considered to see if there is any merit. Objecting just for the sake of it (vexatious objection) is not acceptable.
  8. If you don’t get any success with Council then you can try court proceedings . . . but that could be a big bill.

Good luck!

 

For more posts about what you can build see Restrictions

 

Understanding Title Plans

Title plans are quite a bit different to Survey Plans.

The above is typically what you would see when looking at the title plan for a small subdivision.

This is what it tells you about block No 2, which I have coloured in pink.

  • The total width of the Road Reserve of Smith Court including nature strips and future footpaths is 20m.
  • The *survey grid bearing for Smith Court at the front of the block, is 2 degrees 0 minutes and 15 seconds (200’ 15”) almost due North.
  • The width on the road frontage is 18.00m.
  • The top boundary runs at a bearing of 92 degrees 0 minutes and 15 seconds (9200’ 15”) which is almost due East for a distance of 38.00m (the depth of the block is therefore 38m)
  • The rear boundary runs at a bearing of 182 degrees 0 minutes and 15 seconds (18200’ 15”) which is almost due South for a distance of 18.00m. so the width at the rear of the block is also 18m.
  • The bottom boundary runs at a bearing of 272 degrees 0 minutes and 15 seconds (27200’ 15”) which is almost due West for a distance of 38.00m (the depth of the block is therefore consistent at 38.00m)
  • There is a 2m wide Easement at the rear of the Block Labelled E-I. This means it will be VERY difficult to build on this part of your Block.

Within the title documents you will find a reference to each easement on the subdivision saying what the easement is for.

Generally you will be lucky if there are no easements as over 50% of blocks will have at least one easement

Each corner of the site should be marked with a Boundary Peg which needs to be protected from damage.

*ASurvey Grid Bearing’ is a fixed direction unlike a bearing from Magnetic North which can change over time.

 

For similar posts see Block Dimensions

To find out about Easements see Restrictions

Easements

When I worked for a drainage contractor almost every month I have to tell people that they are going to have to take down their shed, dig out part of their raised garden bed, or take up part of their paved patio.

Why? ……………because they have built them on top of a manhole on a drainage easement that needs to be cleaned or inspected.

How Common Are Easements

About 50% of properties will have a drainage or sewerage easement generally running along the back fence.

These will be shown on the title plan.

Between 5 and 10% of all properties will have a manhole within their property.

This will be used to access the sewer or drain for maintenance.

When buying a house block be very careful if you find a block that has an easement running from front to back, as this will severely restrict your options on what you can build.

Why are there Easements

Easements are a method of giving other people some rights over your property.

Examples are:

  • The right to have a pipe or other underground, or above ground, service laid under your property. The most common easements are for drainage and sewerage pipes. You will sometimes come across utility easements for water supply, electricity, telecommunications and gas.
  • Right of access, for example; to come onto your property and maintain, repair and replace the services.
  • Right to use a shared driveway

Although the person or organization having benefit of the easement has the responsibility to restore the land after maintenance and repairs this does not usually extend to rebuilding any structures such as sheds or replacing expensive paving.

Building on Easements

It can be difficult and expensive to be allowed to build any permanent structure such as part of your house over an easement.

The actual width of a pipeline easement will depend on the size and depth of the pipes, and on having enough room to carry out maintenance and repair.

Another factor is keeping the foundations far enough away that they don’t damage the pipe.

Do you check your  Title Plan?

 

To better understand what you can build see

Restrictions in the Blocks section