You’ve heard us mention in earlier blogs and articles the importance of having a fixed price turn-key contract for your new investment property build. Just to recap; a turn-key contract means that the property is rent ready from settlement and will include all of the necessary items such as: driveways, fences, turfing, letterboxes, clothes lines, kitchen appliances, floor coverings and blinds etc. Basically everything required for a tenant to move in the next day.
Now I thought I’d provide you with a quick example of the importance of such a contract. The contract must have a
fixed-price site works stipulation in it, and cover any retaining or block preparation that needs to be done. Over the years I’ve seen so many instances where investors and owner occupiers alike have signed a build contract with a builder not realising that it didn’t have a fixed price site works stipulation, and then been whacked with hefty bills to cover the siteworks down the track; blowing out the cost of their property.
In many cases investors find blocks of land which they believe to be of good value without having an understanding of the constraints to construction that the site may have. We always ensure that we undertake detailed and thorough checks on behalf of our clients before moving forward to building design and quotation; but I’ll go into this further in a separate blog.
In so many instances I’ve seen investors and owner occupiers’ rush into a land purchase believing that the land will be straightforward to build on not realising the siteworks and retaining that may be required.
I’d like to show you the bottom pictures as an example. The block of land that this purchaser has built on didn’t’ look so difficult when they first bought the block of land, however once the site was cut the amount of retaining required on the site is obvious. The expense of retaining a block of land adds up very fast, and as soon as the height of the wall goes over one metre there are additional engineering requirements.
Luckily we were able to assist these clients with their difficult block and ensured that they weren’t hit with any nasty surprises down the track.
