Hi all
Need some advice on a situation i have.*
I have a potential 4 townhouse site in the northern suburbs of melbourne. Im trying to get development approval but its proving to be a bit of a mission and looks like it will be going to vcat.*
The site was brought for 446,000 in sept 2013. Its risen in value now, i think if i gave it to a good agent i could get about 480-500k for it.*
Purchase costs and development *fees so far im in for approx 500k. I still have about 20k left in costs to get a development approval from vcat ( its fairly certain i would get this, but not 100%)*
At the moment the property is being rented for 260 pw, with a 500k loan thats obviously highly neg geared, but this is not a burden on me as i have another ip with a very low lvr so cashflow positive, small loan for ppor and a good income.
If i did get a permit for 4 townhouses im looking at around 1.2mil in development costs and around 1.34k in total end value of 4 townhouses. Its nice too make 140k *but for 1.2mil investment the profits should be higher and it dosnt account for cgt/gst plus selling costs etc.
The area seems to be pretty solid at the moment and there could be more growth bit im not sure of this as tgere has already been a fair bit.
So to sum up its not the worse situation, im just looking for advice on other peoples thoughts and feedback on wheter i should sell and lose a bit and push through with the development that will make 140k profit of all goes well, but permits are not certain and costs can always blowout.
Im young and and to keep investing so i also have to take into account im paying tax if i buy and sell again, but at the same time even if this investment can still show profit, its been dragging out for so long that i could be investing money elsewhere and using the capital in a better way.*
Appreciate all your feedback.
Cheers
Blair
Need some advice on a situation i have.*
I have a potential 4 townhouse site in the northern suburbs of melbourne. Im trying to get development approval but its proving to be a bit of a mission and looks like it will be going to vcat.*
The site was brought for 446,000 in sept 2013. Its risen in value now, i think if i gave it to a good agent i could get about 480-500k for it.*
Purchase costs and development *fees so far im in for approx 500k. I still have about 20k left in costs to get a development approval from vcat ( its fairly certain i would get this, but not 100%)*
At the moment the property is being rented for 260 pw, with a 500k loan thats obviously highly neg geared, but this is not a burden on me as i have another ip with a very low lvr so cashflow positive, small loan for ppor and a good income.
If i did get a permit for 4 townhouses im looking at around 1.2mil in development costs and around 1.34k in total end value of 4 townhouses. Its nice too make 140k *but for 1.2mil investment the profits should be higher and it dosnt account for cgt/gst plus selling costs etc.
The area seems to be pretty solid at the moment and there could be more growth bit im not sure of this as tgere has already been a fair bit.
So to sum up its not the worse situation, im just looking for advice on other peoples thoughts and feedback on wheter i should sell and lose a bit and push through with the development that will make 140k profit of all goes well, but permits are not certain and costs can always blowout.
Im young and and to keep investing so i also have to take into account im paying tax if i buy and sell again, but at the same time even if this investment can still show profit, its been dragging out for so long that i could be investing money elsewhere and using the capital in a better way.*
Appreciate all your feedback.
Cheers
Blair
