Saving Money & Avoiding Disaster – Case Studies of Projects Rescued by implementing Property Development Cost Savings
Whether it be a land subdivision, a new building project, a renovation or even a demolition, a very important aspect of our role as Project Manager is to save money and time for our clients. This may sound like a cliché to some but it is in fact very real and, what’s more, it’s very achievable, as you will see from some case study stories listed below where we achieved substantial ‘property development costs savings’. We’re not just simply talking about saving client’s time here.
Maundrell Tce., Aspley – Saving = $46,000
This property had a DA approved under the previous town plan to subdivide one lot into 5 and it was still current. External works contributions totalled $166,000. We were asked to review the DA for our client, a management professional, with a view to proceed to carry out the subdivision. We advised our client to re-apply for a new DA as under the new regime external works contributions would drop to $108,000 and the same yield and general other conditions could be achieved. New application fee = $9,000, other costs = $3,000 for a total cost of $120,000 inclusive of contributions. Savings = $46,000.
Raby Road, Coorparoo. Potential disaster avoided.
We were appointed at the tail end of this job by our client, an armed services professional with a variety of investment properties around Australia. We were asked to handle the Plan Sealing only. We always conduct a site inspection as routine. When we inspected the job was pretty much finished and landscaping works were underway. Driveways and parking bays were set out ready to be poured. Under these areas soon to be concreted were water pipes to service the new townhouses. We noted that despite the Hydraulic consultant having specified a 32mm service only a 20mm service had been provided.
Thankfully this mistake was discovered in time to fix at minimal cost – a day or two later would have lead to a much more costly outcome to rectify and some very unhappy new residents when they discovered that they had little water pressure. We encountered other issues along the way that resulted in time delays and cost overruns which could have been avoided had be been appointed earlier.
Kenmore Rd Fig Tree Pocket – expensive investment mistake curtailed
Note that we do not say “avoided” here because our client, an experienced finance broker, did suffer some pain which could have been avoided had we been commissioned earlier. How many times have you seen a property advertised as having “development potential”? This client contracted to buy one such property which at face value appeared to be capable of subdivision into 5 lots. When he contacted us he was on contract to buy this property and had gone unconditional but had not yet settled. The property had several issues affecting development feasibility severely. In fact the then current owner of the property had already approached us with a view to developing the property himself and only decided to sell it after having realised the additional costs and difficulties involved. Our client decided not to proceed with the purchase but forfeited his deposit of $25,000. This could have been avoided had he contacted us earlier.
Rescued not once but twice & Savings generated almost $300,000 –
This small town house project in Wooloowin involved moving, retaining & renovating the existing character home & building 2 more town houses – Read the full story as told by the owner here
Dundall St Mitchelton – Saving = $3,000+
We were approached by the land owner, a songwriter musician and small time property developer, who already had an approved one lot into three subdivision. The approval showed the stormwater pipe passing through a substantial stone retaining wall. It’s doubtful that whoever did the design actually visited the site. To implement the design would require partial demolition and then re-construction of this wall. A simple re-design organised by us avoided this.
Oakwal Tce, Windsor – Savings = $200,000 +
Our client, a property developer, having received their DA for a MUD of two new townhouses to be located behind an existing heritage house in a DCP was dismayed when he was advised by his electrical engineer that Energex required a substantial upgrade of their system and installation of a transformer before they would grant a certificate of supply. The advice was that this would involve a design fee of $3,300 and an anticipated build cost of between $200,000 and $250,000. This would of course render the project unprofitable. We approached our electrical consultants who have since achieved a certificate of supply from Energex on normal supply terms with a new design – their fee was $685.
Arnott St., Kedron – Potential Disaster Avoided
This project involved construction of a pair of strata title townhouses on the same site as a SUD (Single Unit Dwelling). The owner, a medical professional, approached us at construction costing stage so DA was in place. The client was about to commission building plans ready to lodge for BA. Upon reviewing the plans we quickly realised that what was about to be built would be impracticable both from an end sale and also a rental viewpoint and would impact unfavourably on the valuation of the finished building. We organised changes to the design, keeping the same footprint and a ‘generally in accordance with’ approval. We then built the new building and renovated the existing SUD. Our client, who was from out of town had used a designer, also from out of town apparently unfamiliar with our local market. Result – better outcome – better rents and a happy client who is continuing to do more projects with us – these days from the outset, the most recent one, now completed successfully in Gould Rd Herston.
Lawson St Morningside – Cost overuns avoided – substantial time savings
The partners of this project, an engineer and an accountant, came to us with a DA in place and with BA plans and hydraulics etc ready to be lodged for BA for 4 home units and 2 town houses. On review of the plans we were able to identify a number of areas that would have generated variations in any building contract. Variations are costly and besides adding to cost invariably cause delays as well. Changes were made to the plans prior to lodgement for BA and the project was built without any variations whatsoever.
Fisher St., East Brisbane – massive $$$$ savings allowed job to proceed
This job, owned by a Sydney based small businessman, came to us after the DA had been issued. It involved a one into 2 lot subdivision and moving and raising the existing house. Two SUD’s. The quoted costs of carrying out the works – $650,000 – were beyond the client’s budget capability and therefore they had been unable to do the project. We redesigned the project to incorporate an MUD and changed to boundary location. This resulted in major savings – new costs were $400,000 – which enabled the client to proceed with the project.
Mandana St., Holland Park West -sometimes a back door approach brings results – Saving = $13,000
This property was an inheritance owned by a family group who wished to build another house there for themselves to supplement the existing home and create a lot to sell to help pay for it. It involved a subdivision of 1 into 3 lots. Energex’s standard requirements are that all new lots can be provided with 3 phase power. One of the newly created lots only had 2 phase overhead power available in that street. We discussed this with the electrical engineer’s who advised that Energex will not relax the requirement. This meant that to comply our clients would need to spend an additional $13,000 for the upgrade. In this instance we were able to draw on our contacts within Energex to obtain the necessary relaxation. This highlights an important aspect of the difference between experience and inexperience and the benefits of the contacts one builds up over many years of practice.
Norman Street Fig Tree Pocket – Cost savings & neighbourhood stoush avoided
Our client, a small businessman, bought this property with a view to subdividing a lot off the side on which to build his family home. He came to us with a DA to subdivide one lot into two and incomplete plans for sewer, water and stormwater design which not only required access to a neighbour’s property but partial demolition of some of the neighbours improvements. Plans had sat in limbo incomplete due to discussions with neighbours being sidelined by indecision and understandable reluctance on their part to co-operate. We appointed our own design team to review the project – the resultant re-design avoided the need for access to the neighbouring property and was cheaper to build than what would have been the case otherwise
Oakwal Tce Windsor – Saving = $11,300
When looking at this job in respect to the electrical situation described above we reviewed the approved sewer design. This had been designed by QUU which is not unusual and sometimes leads to cost savings however in this case we thought that we could improve it. The QUU design involved constructing a complete new connection to mains on the opposite side of the road which not only involved a considerable amount of new construction but would also involve partial road closure and traffic control. Our new design made reconfiguring the existing connection which was simpler, quicker and does not require road closure or traffic control and was fully contained within the site.