build, hold, then sell method

I have $80,000 cash, no debits and want to start making some real money investing. I'm looking at the build something new, hold it for 1 yr then sell method. What are the pro's and con's?
 
after the 1st year the real depreciation may exceed what you would have paid in tax. you are also taking a mix of short, then long term debt to fund what is basically stock. the ATO will probbaly view you as a trader anyway, but in attempting not to be you will forgo the cashflow benefits of claiming GST.
 
Depends on your goals I guess.

You will always make more money in the long term if you hold, rather than constantly turning properties over. However, you dont get the benifit of cash flow.

The buy and sell process will cost somewhere around 10-15% - this is equity you could keep! With $80k you should be able to find a nice cheap unit/townhouse to buy, do a reno and rent out and it will be neutral within 12 months (at the longest). So why sell and give the future value increase to someone else, plus pay the everyone else who has a stab at your $$?
The only reason I sell is if I cant afford to hold.

Why build something new? the build process takes a good 18months from settlement, which means you are paying interest that whole time.
Why not buy an existing house and do a reno with a 3month turn around.
Lower risk and quicker process.

Just some thoughts to consider
:D
 
Funding it will be a problem too. How will you get the money together for the land and build costs? If you go to a bank for the loan then they'll fix you up with early termination fees if you sell that quickly.

You do realise how long a build takes in Adelaide at the moment too I hope. 15 months is still being quoted by just about everyone.

Gools
 
Why not build new, rent out for 2-5 years and then sell?
Or if you want to avoid CGT, same but live in it yourself and share the house to cut costs. Although you still risk being seen as a trader, the risk really gets lower if you're getting into longer timeframes.
 
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