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  • Writer's pictureHolly Rickard

The Ausly House: Part 4: The Numbers

Coastal House Designer
Aldinga Beach Suburb. Pic:

Follow the journey of designing & building The Ausly, from idea to completion.


Building a luxury vacation rental from all Australian and local products is an exciting venture, but it can also be a daunting task, especially when it comes to securing finance. In this blog post, we'll share our personal experience of securing finance and finalizing our plan for building our eco-friendly vacation rental. We'll take you through the process we followed to determine our budget, obtain the necessary loans, and navigate the complexities of finding the perfect block of land. Our journey was not without its challenges, particularly with the added stress of COVID-19, but with perseverance and a bit of luck, we were able to create a beautiful and sustainable property with a healthy ROI. Join us as we share our tips and insights for building your own eco-friendly vacation rental, made with all Australian and local products.

Determining the Budget

Our first step was to work out our budget. We calculated it based on the average land prices per square meter in the area, plus construction costs, including all the consultants and statutory fees based on the floor area of the dwelling, plus holding costs, set-up costs, relocation costs, and renting costs for the build time. Our minimum profit margin was 20%, so the buying price of the land was a crucial part of making the development work. We knew that securing finance was crucial, so we first applied for a land loan, followed by a construction loan. These were both interest only until we finished the build, and then we consolidated both loans to a variable rate home loan. We did a pre-approval run with our lender to ensure that all the numbers added up for easy approval. Being self-employed, I needed to have eligible tax returns lodged and paid prior to this application, so there was some background work in paying myself the right amount, vs tax savings that my accountant would normally recommend.

The Perfect Block of Land

We found a 354m2 corner block that was in the process of being subdivided, and it ticked all the boxes. To our delight, it had an existing pool and shed on it. With time being of the essence, we decided to take a direct approach and knocked on the owner's door instead of going through their real estate agent. The owners graciously showed us around the block, answering all our questions and giving us a better idea of what we were dealing with.

It was west-facing primary street frontage (facing the bay), it had plenty of Northern exposure, had an existing crossover, and the owners had a site survey and soil reports completed, which was another cost saving. The pool was in a great location, so it would work with the new dwelling design we had in mind, instantly adding 20-30k value to the property, which we felt was not factored into the asking price. The settlement period was going to be 3-6 months, to give them time to formally subdivide which was what we wanted, so we could properly plan for the build.

Covid Unknowns

After returning home to Newcastle, COVID-19 hit, and chaos ensued. We backed ourselves, and our research and made a conservative offer, taking into consideration the demolition costs, and the market downturn in the area at the time. The seller came back to us with a counteroffer of even less than we asked for, including the demolition of the shed. We ended up getting about 9.5% off the sale price, plus other cost savings on other items as noted. We also had a clause in the contract that it was subject to us obtaining council approval for the type of dwelling we wanted. We timed it so we had planning approval prior to settlement.

Before signing on the dotted line, we had to ask ourselves if we were crazy, moving interstate and buying vacant land at the beginning of a pandemic. But we trusted our instincts and moved forward with our plan. It was not without a lot of stress and sweat, though. COVID made things extremely difficult, even for us as seasoned professionals.

*In my next post, I'll run you through checking planning regulations to confirm the planning pathway* Subscribe to the series here.

Holly is an accredited building designer, director of Holly & Co. a building and interior design studio based in Adelaide.


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