building an investment property

Hello all, Havent visited for a while. Been thinking about building my first IP. I am looking at a new land estate in the north part of adelaide. I feel as though, if i can get a reasonable priced block of land <100k and build a sort of villa for around 100k and fork out another 20k or so for extras, eg. air cond, floor coverings ect. I will be left with a mortgage of approx 220k and I feel that rent wont be too far off of covering these repayments. My wife and I have good jobs and have the money to cover the extra, no probs.
My question is, does anyone have experience building an IP?
what are some of the pros and cons? I was just thinking that I can build a nice modern low maint home on a low maint block for a good price. Its just a matter of waiting half a year or so to get it built.
We currently are buying our home and plan on using the equity from our home to fund the IP.
Any advice/opinions will be greatly appreciated.
I have built several IPs over the last few years and have found them to be very successful.
I on the other hand have purchased quite a few older houses and found them to be very successful with immediate results.

The main thing going against you is time.
You have to buy your land first and then you need to start paying for that land straight away so prepare for that.
Soil tests,plans, builders etc after.
The house might not be finished for 12 months and not rentable for several more months after that.(Allow three months for paperwork)
This is where you need to have some money aside.
Try and do as much as possible yourself,the trick is to keep the mortgage as low as possible.
There will be people on this forum saying to borrow everything and they are probably right,(Tax wise) but I myself like a smaller mortgage and larger rent.

Don't be to fussy,every time you change your mind about something,it will slow the progress down.Know what you want before you sign the builders contract,don't expect them to change after because you didn't think of it.
Ask lots of questions:)

In the end you will have a brand new home with your own modern touch to it.
Money wise,I believe building wisely gets you a better house for similar money :D
As DreamBig has said already, you'll be struggling to build anything for $100k. A villa/courtyard home will be $140k+ for a 3x2x1. With the building delays due to the FHOG demand it will take 15 month minimum at the moment too.

As a rule of thumb I take the advertised price of a house build and add an extra 50%. The price you pay is not the price advertised with the little astrix next to it.

Just keep those few things in mind if you decide to go down this path.

You can build more cheaply than $140k but then you wont get a nice modern low maintenance home!

thanks for replies. I saw in the paper and on some of the builders websites homes that are 90 to 100k. This was for a smaller villa type home with 3 beds, 1 bath, 1 car. I thought this would cover the cost of the home then i would have to pay for any extras like floor covering, cutains, air cond ect. and was thinking that another 20k would be sufficient. So you all dont think it can be done much under 140k?
I saw on the AV Jennings website that they guarantee building within 26 weeks? But i guess that all comes after approval, soil tests, ect. right?


On top of the $90-$100k you need to add the additional footings costs, service connections, additions to standard inclusions (nice things that everyone includes like auto roller door, portico, slightly bigger this and that).

3x1x1 you should be looking at around $140k but depends on the area/soil.

AV Jennings are saying 15 months for the whole process at the moment. Yes, the 26 weeks is purely the construction time frame. Not sure I like the guarantee, will they delay the start of construction till all the tradies are lined up so it may acutally take longer all up? The idea of $200/week for delays sounds nice though.

Have a look at what completed ones are selling for and look at how much it will costs you over the construction period in holding costs. You may be better off buying a completed house. A brand new home sounds so tempting but 15 months of holding costs (not just the land) starts to add up. If you can buy a similar house around 12 months old for similar cost then it might be better to get it and pop a tennant straight in.

Lots to consider.