By Carly Crutchfield
Carly Crutchfield is the CEO of Australian property and investment firm CCORP and its subsidiaries companies. She is a property developer, investor, public speaker and self-made millionaire. In this new and exciting addition to Think Big magazine, Carly provides you with personalised answers to all your property and finance questions!
Q. Are there some ‘tricks of the trade’ that would be helpful to know when it comes to property? Vee Mignone
A. One of the most important things you can do is to ensure you get three opinions or quotes on absolutely everything. A lot of people get themselves into trouble when they only ask one person. This is particularly important when getting quotes. You should get three quotes for everything you do such as builder’s costs, architect’s costs, engineer’s costs, real estate fees and any other costs you will incur. Another thing that I cannot stress enough is the importance of making sure you understand what it is you are doing. Terminology can vary. If there is anything you do not understand make sure that you ask questions. It is the simplest of misunderstandings that can cost you the most money further down the line.
Q. 1. What are the escalation rates for construction, rent/and and absolute sell-on escalation rate per annum when doing your feasibility? 2. What are the estimate costs for conveyancing per site for selling and buying? 3. When developing or renovating property what are the overall costs for consultants (architects, engineers etc)? Jal Cordier
A. 1. Escalation rates generally are only of interest if you are developing or renovating a property. It refers to how much the cost of materials and construction could rise (escalate) during the development or renovation. Generally, if you are doing a project that only takes one year or less don’t worry about the escalation rates. If you are doing a development that takes two years, the escalation rates will be approximately 5%. To be on the safer side you can factor in 7-10% when calculating profits.
2. $2,000 will usually cover conveyancing fees on purchase per site. Conveyancing fees when selling are generally approximately $1,000 per site, this will vary based on which solicitor or conveyancer you use and how much business you give them. But those are the general rates that my clients and I would pay.
3. The costs of the different consultants will vary from one project to the next depending if the project is already DA approved, how much work is needed when you take it on and of course how large the project is. To get an accurate estimate you can call an architect for a free quote. To make it easy you can use a percentage of construction costs as an estimate. This would generally be about 3%–5%. You should, with some good negotiating, be able to pay consultant fees of about 3% of you’re overall costs of the project.
Q. What are the basic requirements to determine if a property (flats/multi-units) can be strata titled? Does this vary between States and local governments? Brad Davis
A. Primarily, the building will have to meet all the new current building codes and the individual council requirements. The building codes are Australia-wide as per the Building Code of Australia (BCA) while the council requirements will vary from council to council and State to State. The best thing to do in this circumstance is to have the block assessed by a local architect. He will need to review the property and see how much work has got to be done to it to make it comply with current rules and regulations to meet the specific standards, once you know this you can then assess how feasible it is to undertake strata titling.
To get your property and finance questions answers, email Carly on carlyc@ccorp.com.au and look out in our next issue to see if your question is featured!
Carly Crutchfield is a self made millionaire, the CEO of several national companies she’s been involved in developments throughout Australia, New Zealand and America with a value of more than $200 million dollars. www.carlycrutchfield.com.au
