As property prices in most metropolitan areas have skyrocketed over the last 10 to 15 years, the demand for well located town houses has continued to increase often forcing out young and old buyers alike.
Who is it for ?
It's a meeting of the minds.
Professional couples with young families who aspire to but cannot afford to live in an urban neighbourhood
Mature empty nesters who have outgrown their big family homes who want to remain in the area .
The dilemma to enter or exit the real estate market for these two demographics is two fold.
A “joint venture” development can potentially meet the needs of both.
It can also attract a property investor wanting to enter the rental market with a brand new Townhouse investment but wants the support and knowledge of an experienced builder to be a partner.
What is it ?
A great solution to a two fold dilemma.
A joint venture development is a great solution because while one party puts up the land ”home owner” , the other party, “the builder” carries out the development project including architectural plans , town planning and building permits.
All the owner of the land has to do is cover any land holding fees such as an existing mortgage or new purchase finance for the duration of the project and the Builder contributes all the project management services as well as overseeing the building and landscaping works.
How does it work?
It is a win win for every one.
Both parties share all of the construction and administrative costs equally (i.e. design/ architectural fees, permit costs and building and landscaping costs) throughout the development. On completion of the project the owner and the builder settle on the predetermined land purchase price that each townhouse occupies and the builder pays the land owner for his portion of the land.
Often the land settlement between the builder and the land owner equates to the construction cost that the land owner has financed for his or her townhouse and therefore settlements cancels out any debt for the land owner.
On completion of the project the owner, often free of any debt ,gets the keys to a brand new residence on a suitably downsized sized block.It is at this stage that the builder is free to sell or retain the second town house.
How big a block do I need ?
Big is not always better
Ideally a block that is 650 sq metres sufficiently showcases two great side by side townhouses.
The width of the block is significantly more important than the depth as it optimises independent street frontage with garaging.
A corner block utilises access from two street frontages and can offer more design flexibility while a more compact block requires a ground level and first floor apartment style townhouse ,very much sort after by the security conscious buyer.
If you are interested in exploring the possibilities of a joint venture development in more detail, please ring David McCallum during work hours 9572 3600 or complete an enquiry form on this website.