Building a New Home in the Northern Rivers – Where to Start
Determining Your Budget
Setting your budget right from the start and factoring in all the costs associated with building a new home is the key to a stress free experience.
If you haven’t already, Now would be the time to work out how much you can borrow.You could use an online calculator for this but we recommend making an appointment with a finance broker and discussing your specific situation. If you have an existing relationship with a bank or credit union then make an appointment with them, although you have to remember that banks and credit unions have their own limited set of loan products, if you fit its a Yes and if you don’t its a No. Financial brokers have a lot more products to offer so finding a product that fits your situation is more likely, that’s if your not a straightforward yes from your bank. Construction loans are quite different to normal home loans, so asking your broker or banker if they have experience with construction loans is advisable.
Now that you have worked out how much you can borrow, you will need to consider how much you wish to spend on your new home development, borrowing at your limit is usually not the best situation to be in, keeping a little in reserve is where you really want to be. When choosing a budget things you should consider would include how much you will be comfortable paying each week in repayments. Factoring in interest rate rises and any future changes in your circumstances.
When it comes to building a new house not all the costs are in the land and the building alone, there are other costs like stamp duty on the land, financing costs, interest on you loans white you build, landscaping after construction and more. It would be beneficial to talk to a new home builder at this point, any reputable builder should be more than happy to meet and discuss your budget and do some rough figures with you.
Download out True costs of building – Feasibility Workout Sheet from our resources section
⃞ – Determine Borrowing Capacity
⃞ – Talk to Broker or Banker
⃞ – Decide on a Comfortable Budget Figure
Finding the right land
It is so important to be well informed when selecting land. Sometimes a block of land that seems to be a great deal can turn out to be the most expensive block in the street to develop. So where do you start.First of all you will need to make a short list of land that is available in your desired location, this will involve making contact with the selling agents. If you are already talking to potential new home builders they may have or can obtain a list of available land and current pricing in you area. Visiting the available lots to get a feel for the areas would be beneficial at this stage. Once you have you shortlist worked out you may want to consider how the locations will fit in with your lifestyle, things to consider could include
- Proximity to your workplace, how long will it take to get to work ?
- Where are the nearest Schools, are there school busses close ?
- Where is the closest shopping Centers ?
- What is the feel of the estate ?
- You you close to your other activities and recreation ?
- What are the future development plans of the Estate eg. Parks, Paths, Playgrounds etc.
- The size and dimensions of the block, if you have a particular design or layout in mind.
Once you have picked your ideal lot we would recommend talking to a new home builder about the land your looking at, finding potential issues at this stage can help to make a more informed decision. Cypress Designer Homes offer a Free Site Evaluation in the northern rivers area so this would be a great time to make an enquiry if your located in northern NSW.
There are a great number of factors that will not only affect the cost of the building but affect the whole development cost. Knowing these early on can reduce any stressful surprises later on.
Some things to consider would include
The Slope of the land. This would be probably be one of the largest if not the largest factor affecting the cost of building a new home and the development of the property. Although sloping blocks can be desirable for there access to natural light desirable views and in most cases the land will cost less to buy than lots that have less slope. In most cases the more slope a lot has the more it will cost you to build a house, “there is simply more work and materials that go into a build on land with slope”. Landscaping which most new home builders will not complete for you will cost more and retaining walls and additional drainage works could also be needed.
Bushfire Affected. This is quite common in new residential estates in the northern rivers but is easily overlooked, as new lots can be quite a distance for any bushfire source and still have a Bushfire Attack Level (BAL) rating. Local councils can inform you if the lot is affected by bushfire all you will need is the DP and Lot Number to make a simple enquiry. They can identify if the lot is affected or not, though they will not be able to identify the BAL rating if the subject land is affected. While a low BAL Rating may only add a few thousand dollars to your development costs. In some cases a BAL FZ rating could add so much additional cost that the development could become Un Feasible.
Wind Rating and Soil Class. This can have an effect on the cost of construction. This is the domain of a geotechnical engineer but in general a reputable builder should be able to advise on what they have experienced on other developments in the locality.
It is important to keep in mind that the land sales agent is usually working on behalf of the land developer or seller and is going to be forthcoming with the information that paints the best picture of the property for sale, let’s face it “that’s their job” to sell. But with this in mind doing your own due diligence at this stage is well worth the effort.
⃞ – Short List Available Land
⃞ – Visit the lots on your shortlist to get a feel for the area
⃞ – Evaluate the Location
⃞ – Identify any negative features preferably before purchase
Check out Part 2