Doing Your Block By John Dagge

Doing Your BlockWhen Eltham resident Alan Phillips decided to downsize from his three-bedroom home on a quarter-acre block to a new two-bedroom town house in the same area, he soon found himself priced out of the market.

Rather than move out of the area, Mr Phillips is now considering cutting 260sq m out of his backyard and using the proceeds to not only fund a renovation of his home, but put a sizeable dent in the mortgage as well.

“It’s a big block so the idea is to cut it in half and use that money to do some renovations and pay off the mortgage,” Mr Phillips said. “I originally looked around the area to buy a town house but, for what I would sell my place for, I can’t get something that I like. If all goes to plan, I will now be able to stay put and get the house and lifestyle I want. This way, I get out of doing the mowing as well.”

DO YOUR HOMEWORK

It sounds easy, but subdividing your backyard is not for the faint-hearted. It involves negotiating bundles of red tape and potential legal landmine. It’s not quick either – the average application will take 12 months and can easily stretch to 18.

Correct land boundaries must be determined as they can potentially differ from your fence line. Local councils need to be consulted for specific restrictions governing land size, zoning, easements and prohibited uses. Council overlays covering environmental, heritage and design issues also need to be investigated.

Scott Jukes, president of the Institution of Surveyors Victoria, said home-owners were often surprised to learn their fence line did not follow their property’s title boundary.

“The older the original title, the more likely it will differ from the fence line,” Mr Jukes said. “You cannot just assume fences, walls or whatever else will delineate a block’s title boundaries.”

Hidden costs also abound. The cost of removing trees from any new block is often not accounted for, while putting in stormwater drains and connecting power to the block can also provide your wallet with a heavier-than-expected hit.

“People looking at a subdivision often forget about the infrastructure side of things,” said Kathy Vant Foort, director of Backyard Buyers. “Going through all that can be a costly process.”

Objections from neighbours can also throw another unexpected — and potentially financially and emotionally damaging — spanner into your subdivision works.

“If you are in an area where there has been a fair bit of subdivision already carried out, it is generally not an issue but if you are the first person in the area to go down the subdivision path, you can have problems,” Mrs Vant Foort explained.

And just because your neighbour made a bundle cutting their backyard in half and building two town houses on it, don’t assume you can do the same.

Ross Voci, director of Property Subdivisions, said budding developers frequently get themselves into trouble by assuming they can copy what someone else in the street has done.

“Council requirements and by-laws change on a daily basis,” Mr Voci said.

“These laws are changing all the time, so you need to be really up to date with them.”

DON’T DEVALUE YOUR HOME

Home-owners blessed with extra space are also cautioned to carefully take into consideration the financial impact any subdivision will have on their existing home.

Poorly managed subdivisions can devalue the existing family home and block beyond any potential profits.

“The idea of cutting the back off your block can work for some people but it’s not always the case,” Tim Fletcher, director of Fletchers Real Estate, said. “Don’t assume two blocks will automatically give you more money. A small house on a large block might be worth more to a potential buyer than a single small block. Buyers can be willing to pay more to get your block, demolish the house and build a big new house with a swimming pool and backyard for the kids.”

What goes up next to your home will also impact its price. Mr Fletcher said home-owners considering subdividing their backyard needed to think about the character of the development that would stand next to it.

“If you have a development going up that is out of character with your home and it just does not fit the block, then this is going to have an impact,” he said.

“People considering a subdivision need to think about it very carefully and get professional advice.”

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