PROPERTY DEVELOPMENT

What to consider when building a House behind a House

February 13 2014
House behind house

What to consider when building a House Behind a House

For those of you lucky to be living on a large block, you might be sitting on a gold mine without even realising. With the right zoning, building a house behind a house can be a fantastic way to generate wealth, whether you’re a first-time investors or seasoned developer.

Although subdividing a block can kick-start your investment portfolio, increase equity and provide you with an additional revenue stream – we’ve outlined some important factors to consider before you start digging for gold in your own backyard.

Research the zoning and development potential.

A common mistake people have is thinking they can replicate the same design they’ve seen from a display home that has a street frontage block.

Unfortunately, it’s not as simple and straightforward as that.

Areas are assigned an R-Code, which dictates the minimum and average land area required for construction of a dwelling on a block of land. R- Codes vary R2 , R2.5, R5, R10, R12.5, R15, R17.5, R20, R25, R30, R35, R40, R50, R60, R80.  State planning policy 3.1 Residential Design Codes, have a table to show minimum site area per dwelling along with the averages that must be achieved.

The R-Code basically determines if your block is large enough to accommodate another home, so taking this into account is especially relevant when building a house behind a house. R-codes are put in place to control population density in residential neighbourhoods (so that we’re not cramming too many people into too small of a space). As it’s a ‘rule’, it cannot be changed or negotiated, even if you think you have enough space to re-develop the rear of your block. Checking the zoning is the first step in doing your homework to determine whether or not you can fit another house on the same block of land, however having minimum access down the side also requires some homework.

Not all councils are created equal.

Just as all blocks carry their own idiosyncrasies, it’s important to remember that councils and shires work with their own set of interpretations of the R-Codes . Whilst zonings (i.e. R-Codes) are consistent across all councils; schemes, policies and basic requirements can dramatically vary from one shire to another.

For example, the City of Canning typically requires a 5 metre access leg, whilst others allow as little as 3 metres. Generally most shires encourage outdoor living areas facing the north, however some shires may have policies in place that do not require this.  Some shires also have a precinct where they require certain styles of frontages and even the use of certain materials, some may even require the rear house to compliment the front.

So if you’re going to subdivide, keep in mind that you may have to pay increased rates for public open space, parks, gardens (or anything else as deemed necessary by the council) and that some of these policies may greatly affect your house design, dramatically altering what you originally had in mind for the new build.

Time is money – enlist specialists in their field.

The building process can be a complicated and time-consuming one to say the least, so in the interests of saving time and money, it’s imperative to work with professionals that specialise in this type of construction.

You will be dealing with sales consultants, surveyors, draftees, and construction managers, from concept to lock-up. Time is money, so working with those experienced enough to understand the varying requirements of councils and shires can save you months of waiting, which means you’ll be able to generate rental income or move into your family home sooner. The time it takes to get a planning approval can vary from one shire to another by several months, should the application be incorrect or incomplete then the shire will send back the application to the builder for further work. This can add many months to the process if you’re not dealing with experts.

Time delays and working with builders unfamiliar with the development process and individual council requirements can dramatically increase the costs in the build, or worse, not knowing upfront what all your costs will be. The process of building behind an existing dwelling is not the same as building one house on one block. Building Companies that are the leaders in this type of construction have separate building arms to cater for this type of work.

Nasty surprises are more likely to crop up if you’re dealing with consultants who don’t encounter these issues on a regular basis, or if they simply aren’t aware of such costs.  It’s not that the builder or the consultant are dishonest, they simply may not know everything that is required to build in your back yard.  It pays to ask the question before it’s too late – for example, do you need a limestone track to have access for trucks to deliver materials to the property? Knowing where to go to obtain that information is imperative so you know what to expect, what to look out for and, ultimately, what you’re up for.

Building a house behind a house can present an enormous opportunity to retain your current home and reap the financial benefits from developing the rear. It is certainly worth the time and effort, but with so many factors determining the outcome of your project, it’s essential to do your homework. Find someone who can move and push the envelope whilst accommodating council policies and your design guidelines, and you’re well on the way to striking gold in your own backyard.

This article has been written in consultation with Peter Grickage, Sales Consultant at Ventura ID.

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