What lies beneath – unearthing your site’s secrets
Asbestos, building rubble and even kitchen appliances – buried secrets that can be detrimental to your residential development and how to find them.
Many investors only focus on the structural aspects of a property, i.e. the house, when searching for their next development site.
However it’s always a good idea to find out what lies beneath the surface of a site, otherwise you might end up with a costly remediation bill.
Case study: Development site with (hidden) pool included
Take the below case study, for example.
A client approached Momentum Wealth to find him a development site with specific features, including:
- Located in an established area
- Close to parks and amenities
- Good capital growth drivers
- High rental demand
Our research team worked with our buyer’s agents to create a shortlist of possible sites that met the client’s criteria.
After completing some initial feasibility calculations we identified a development site and, with the client’s approval, placed an offer on the property, subject to due diligence.
As part of our due diligence we conducted satellite photo analysis which discovered a very serious issue with the property.
Below the surface of the site was an old pool that had been buried by the owners some years earlier.
Our investigations found satellite photos that showed the pool being buried and a soil test determined that the pool wasn’t filled in correctly, which could cause soil erosion and costly damage to any future development on the site.
Because we were able to identify the issue during due diligence, we were able to negotiate the remediation of the site at the seller’s expense.
This case study illustrates why it’s imperative to complete adequate due diligence, including soil tests, when buying your next development site, even if everything above ground seems fine.
If you fail to do so, you may buy a property with severe geotechnical issues that could cause significant damage to your development and could cost thousands of dollars to repair.