Hi all,
We haven't started the research/D&D process as yet, but for IP3, our thought is to buy a house on a sub dividable block in Melbourne, renovate the house, subdivide, sell off the second block.
We have excellent serviceability, but not that much equity so are very keen to generate as much equity as possible over the next few years to allow us to keep purchasing.
I don't think we'd have enough cash to develop the second block, hence thinking about selling it as land only. We have also discussed the possibility of selling it with a DA.
We purchased a PPOR last year which is sitting at an LVR of about 80/20 so would like to use the proceeds from the land sale to help pay down our PPOR loan.
We would be looking to spend up to $400-500k on the purchase (plus renovation cost of up to 10% and subdivision costs), with a goal to secure a property that will generate strong capital gain, and could afford to cop a lower yield (say 4%) if it meant a higher capital gain in the near term. While we would keep the property for the long term, we need equity for deposits.
Obviously buying somewhere where there is demand for vacant blocks is important. As is the block size in relation to the types of blocks in demand in that area.
What are the must dos and potential pitfalls of this approach? What advice would you give someone starting to investigate this strategy?
We haven't started the research/D&D process as yet, but for IP3, our thought is to buy a house on a sub dividable block in Melbourne, renovate the house, subdivide, sell off the second block.
We have excellent serviceability, but not that much equity so are very keen to generate as much equity as possible over the next few years to allow us to keep purchasing.
I don't think we'd have enough cash to develop the second block, hence thinking about selling it as land only. We have also discussed the possibility of selling it with a DA.
We purchased a PPOR last year which is sitting at an LVR of about 80/20 so would like to use the proceeds from the land sale to help pay down our PPOR loan.
We would be looking to spend up to $400-500k on the purchase (plus renovation cost of up to 10% and subdivision costs), with a goal to secure a property that will generate strong capital gain, and could afford to cop a lower yield (say 4%) if it meant a higher capital gain in the near term. While we would keep the property for the long term, we need equity for deposits.
Obviously buying somewhere where there is demand for vacant blocks is important. As is the block size in relation to the types of blocks in demand in that area.
What are the must dos and potential pitfalls of this approach? What advice would you give someone starting to investigate this strategy?
