Common Property Investor Mistakes
Over the years I have been invited to go inspect properties with clients for the suitability of development. These clients with a view to purchase these properties are always looking for value when it comes to development and investment properties. One recurring theme is a real estate agent advising my client that they could ‘build-in’ underneath the existing home.
You have probably seen these types of homes before - classically built in the 70s and 80s they have three bedroom and one bathroom raised off the ground by 2.2-2.5 metres and have a set of stairs out back and a small deck or landing area out the front. Downstairs is typically a garage and laundry with a patchwork of concrete slabs - potentially closed in by brick or weatherboard - other times not at all.
The problem with these types of homes is that they typically do not have the ceiling height to accommodate building in underneath.
The requirement as per the National Construction Code Volume 2 for ‘habitable rooms’ - things like living rooms, bedrooms, dining rooms ect. - most of the rooms in a typical home - require a 2.4m ceiling height. That height is measured from the top of the floor covering (tile, carpet ect) to the underside of the ceiling (plasterboard or painted surface).
This is a requirement under the NCC due to hazard from a house fire. You need enough of a buffer between the ceiling and the typical height of a persons head as they are sleeping in a bed to give them enough time to wake up to a smoke alarm warning before they are smothered by the smoke.
Anything less than 2.4m in ceiling height means you would not only be not compliant with the Construction Code and wouldn’t be able to find a certifier to sign off on your new renovation - but you could also be putting peoples lives in danger.
There are a range of other issues that go hand in hand with homes that have been built in this way as well.
The aforementioned patchwork of concrete has joints in between them. We call these ‘cold joints’ and they can open up slightly allowing termites to enter into the home and start travelling into that frame placed over the join.
The slabs themselves typically are just there for car parking and have no certification or even design plans from an engineer. Typically they have no vapour barrier which presents rising damp and mould or rot from setting in.
Sometimes the homes themselves are dug out and a small brick wall is there below natural ground level - generally not waterproofed!
Then of course because the ceiling height is not compliant with the construction code - there would have been not certifier signing off on the works. So then you have issues ensuring that all the other work was also done up to scratch and compliant materials were used in your framing, bracing, plastering, shower screens, waterproofing membranes, electrical and plumbing/gas works.
It is very important as a potential new owner of one of these properties to understand not only the lack of value which a house like this adds but also the potential liability you could inherit.
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Until next time!