House and Land Package For Less Than 300K?

Hi

Well I'm looking at buying a land and house package for investment (hopefully build in the equity).

The property will most likely be a "hold" property for me, although if the price is right I will sell

I have some ideas what I'd like to do but I just wondering if anyone has any experience and can point me to some areas that might be worth looking at in my price range.

Thanks in advance

Hi Cheeks.


One of the biggest dangers with house land packages is getting completion for occupancy on the home, and this can really drag out.

Because every day you are paying interest on the debt, and this will be a progressive draw down. It may take 12 months from settlement of the land.

Consider this: the house is 95% complete, and your debt nearly fully drawn.
You have no income fom rent.
Completion to Occupancy starts to drag out......(lots of reasons this will happen).

You need to have protection in the contract for a completion date, and penalties that apply after that/or some type of insurance, otherwise the interest costs will kill you.

GarryK

I can only speak for my local area, however I know there are plenty of things like that available in the far SE Suburbs of Melbourne in the city of Casey (Narre Warren South, etc).

My sister and I have both built homes with Northridge homes, however there are plenty of house and land package mobs there.

Garry K is correct, mine took 12 months from signing to lock up. At the time the interest I paid was minimal compared to the amount of 'instant equity' I created at the time. I built a 260k house for 225k in 2003. NAB valued it at 285k in Feb this year. I don't think this area has much steam left in it though as they're at the upper limit of the price range for the demographic that chooses to live in the new suburbs.

On the plus side I didn't pay stamp duty (in Vic I saved over $10k) and my first full year of depreciation is $7.5k

It rented out in a flash and has had the same tenants for almost 2 years.

Hi Cheeks

We were in WA the other week & went around show homes in the Mandurah region on several of the new estates such as secret harbour, Meadow Springs, Lakelands, Port Kennedy etc. Even in the midst of the boom that is happening some of the builders are offering great packages from as low as $275,000 but I'm afraid I didn't note which builder that was with the cheapest on offer. There are still builders guaranteeing shorter building periods whereas others have closed the show homes as they can't keep up with demand so you have to shop carefully. Finished homes on these estates are already around $350,000 & higher on the 4 x 2's so later on once these estates become more established with prices set to rise for some time yet you can't go too far wrong even if you cop a bit of interest.

A few months back we put in for 2 x expressions of interest on packages on the Anchorage in Rockingham we put down $1,000 per block plus $500 per house. The land doesn't settle until around Jan & the values now would be $30,000 - $40,000 more per block based on what is available for sale now & based on at least one re-sale I know of. If the houses were built at this point the full turn key cost would be $340,000 but similar homes are already selling at $380,000 - $400,000 & with no more land releases I expect to see much higher values by this time next year when I would hope to see the homes completed. If we had got in much earlier we would have made our fortunes as I know many people on the forums have but I'm quite happy even getting in late. Whilst in Mandurah to check things out, as I did everything over the net, I also found a brand new exec 3 bed/en-suite plus semi-ensuite 2 storey townhouse for only $295,000 which I snapped up as the rent will be quite decent aswell as the expected CG.

I believe great things are expected of Port Kennedy so it might be a good place to look.

Happy Hunting!

Sparky

You can do house and land packages up in Cairns for around $280K, turn key 4x2s. Blocks start around $100K mark so from my calcs and from a rent return perspective, still a lot cheaper than anywhere else in Oz. But Cairns is cyclical and some say could be catching up to rest of Qld in terms of approaching a peak. Cash flow better than WA but CGs may not be there immediately. Then again, if it pays for itself, do you care?

Diificult to do H&L packages in WA for under $300K now except if you go 3 bedders or very small 4x2s< 180m2 or if your block is further away from the beach but why over capitalise on the land? Ventura is selling turn keys with rent g'tees starting $400K in Anchorage. Average decent block within 1km of beach costs between $160K-$200K and by the time you build a respectible 4x2 - $180K-$200K finished plus $15K funding cost, you're left holding a very -'vely geared property. If you flick it, consider GST and CGT issues - read Ausprop's previous posts re this. You'll be needing all the deductions you can get your hands on - I certainly will be!

sparky23 said:

Hi Cheeks

A few months back we put in for 2 x expressions of interest on packages on the Anchorage in Rockingham we put down $1,000 per block plus $500 per house. The land doesn't settle until around Jan & the values now would be $30,000 - $40,000 more per block based on what is available for sale now & based on at least one re-sale I know of. If the houses were built at this point the full turn key cost would be $340,000 but similar homes are already selling at $380,000 - $400,000 & with no more land releases I expect to see much higher values by this time next year when I would hope to see the homes completed. If we had got in much earlier we would have made our fortunes as I know many people on the forums have but I'm quite happy even getting in late.

Sparky

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Dear Sparky23,

Good on you! Congratulations!Well done.

Cheers,
Kenneth KOH

Hi Kenneth

Lovely to see you back on the forum! I am sorry that we didn't get to catch up when we were in Mandurah but never mind - maybe next time! We ended up staying at San Marco at a townhouse on the water - beautiful! Whats more only $800 for the 7 nights so if anyone else is headed that way let me know & I will put you on to the owner! However you guys on the Western side need to do something about your weather next time I'm over!

Sparky