Build granny flat or by new property

This question has been discussed a few times in this forum. Currently the Sydney market is a little hot at the moment and although Id like to buy another property Im not sure its the right time now. I am chasing capital growth, however do like the security of a good yield.

If I buy another property Ill be hit with more land tax also. Need to weigh up the options of building a granny flat or buying another property. I rode the cycle last property with my granny flat build and it's done me well.

Granted I could have bought 2 properties back then but didnt want the risk.

Here are the details for the current purchase
Property bought for 440K (90% NO LMI loan, Westpac)
20K renovation
Rent: $450/week

90-100K equity currently remaining for use for new purchase or GF build.
Campbelltown area: I estimate the GF to add 70-80K value to the property.

If I build the granny flat, (lets say 95-100K)
Rent: $400/week

If I am able to do some sort of construction loan for the granny flat then that would be perfect. However, I doubt this will be the case and have been considering just building the granny flat with my remaining equity.

Even if I did build the granny flat I'm sure a valuation after the build would still give me enough equity for a new purchase.

The other alternative was to use the 90K as a deposit for another property and eventually build 2 granny flats on the back of both with the equity gain over time.

Thoughts?
 
WOuld the GF have a negative influence on the existing houses rent or is there plenty of space to achieve adequate privacy?
It seems strange that with a 20k reno you would only get 450 per wk for the house and yet 400 for the GF? Is the house only 2 bed?
 
Land tax is the main reason I have held off buying another property in Sydney.

Even if i can get it neutral or slightly positive in this current market, my land tax would be $8k per year on the new property before i even get a chance to do anything else.
 
Personally i would wait for Campbelltown to peak ( it's close to it) so that when you do add your GF you can get it all back in Equity.

Also i would wait for interest rate to start to go up 0.5-1 points as this will slowly increase your rent as well...hence your GF build will be MAXIMIZED!

the cost of your GF will be roughly the same cost in 18-24 month time...so time it.

If you have the ability and desire buy another property with your 100k...and land bank ( ie have 3 properties to hold onto rather than 2 + gf)
Don't sink $$$ into a property that's not yet preforming...you already own it anyway....no need to rush.
 
Land tax is the main reason I have held off buying another property in Sydney.

Even if i can get it neutral or slightly positive in this current market, my land tax would be $8k per year on the new property before i even get a chance to do anything else.

I know what you mean...mine is sitting at $12-13k hence i have started buying in a trust now....yes still have to pay Land tax but less than the "prem land tax"

It's just the cost of doing business...i expect your Sydney CG has made min x 5-9 ( total) of your 8k land tax..
 
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