3x or 4x Townhouse?

[carlau]

I have a site which is 800m2.

And my options are: to either build 3x large 28sq townhouses or 4x townhouse (2x 17sq townhouses and 2x 21sq townhouses).

Paid $1.2 Mill for the site a corner lot in Essendon.

I want to keep the first townhouse and sell the remaining townhouses.

I know if I build 3x large townhouses they will sell for just over $1mill (3x $1mill = $3mill)

compared to the

4x townhouses which would in the range of ($680k for the 17sq’s = $1.36mill)
($750k for the 21sq townhouses = $1.5mill) = $2.86mill

Cost of construction would be almost $1mill for complete completion for either 4x townhouses or 3x large townhouses.

All townhouses would be detached.

The land was purchased under a trust.

How much tax would I need to pay if I decide to sell 3x or 2x townhouses (Note I would keep the 1st townhouse for myself)

Would it be wiser to sell off the plan and are there any tax benefits by doing this.

So if I build 3x townhouses and sell 2x townhouses how much tax would I be required to pay (A builder would be building so I would have no part in the construction of the townhouses)

Also if I was to build 4x townhouses and keep the 1st one and sell the remaining 3x townhouses what tax implications would I encounter and what would be the best path to take.

I want to use the funds from the sale to fund another project.

If someone could shed some light on this it would be of great help.

 

[Ridin-High]

My advice would be to speak to your professional advisors eg accountant and marketing agent

 

[carlau]

Can you elaborate what marketing agent does? and is?

 

[Ridin-High]

Ill answer your question with the below

http://www.youtube.com/watch?v=aRK5vLUYLmg

by marketing agent i mean the real estate agent (the person selling your product)

 

[craigb]

i would go with the four units , note the rent in the burb, your building in , also rent on 1m + homes get no where the return smaller ones do, why?????
so value the rents in comparable units , and knowing the rental market is geting tighter , they will all be leased , you should do these sums first before you choose to sell them , you might find a short fall of 1k a month, by the time they are built and rented, so cross that bridge when it comes.

 

[Learnings]

Drawing down the equity not an option? The depreciation on the new places would be worth hanging onto for a few years wouldnt it?