House and land package in Caloundra - Sunshine Coast

Hi All,

I'm considering buying some land to build a house with the intention to sell it on completion.

The idea is to make between $20,000 and $30,000 without holding the asset (and liability).

I've been offered a deal in the Sunshine Coast (Caloundra) in one of Australand's estates called Ivadale lakes.

Based on the costs I've calculated, I'd need to sell the house (4 bedrooms) for around $505,000 at the end of the year.

I do not know the area so would be interested in getting any information you would be willing to share about the market in the area.

Do you think this price is achievable?
What do you think about the probability of a quick sale of a brand new house?
Any pitfalls or issues to watch out for when buying in this area?

Thanks
MJ
 
Australand are involved in some great developments. Our clients had purchased 15 blocks in the Somerset Estate in Bald Hills/Carseldine. Here the blocks where purchased for around $240k and a 4 bedroom dwelling cost around $210k to build. All have held their properties except one which sold for $540k.

Values in the area have had its ups and down and this should always be a consideration when building to sell.

As for building in this new development please consider the land cost and allow around $210k as building cost if the resale is only $505k then the margin may be a bit too tight after purchase costs, interest and selling costs.
 
Sailesh,

$210,000 for building is spot on. The question I have is in relation the ups and downs you've mentioned. How can that be determined in the current market. Where could I get some indicators for the area?

From what you've said, your clients did well in the area.
 
That is a big outlay for such a small return so only a slight misjudgment on holding costs, ie rates, interest payments, selling costs, length of time to sell and settle, re-sell value etc and the profit is gone.

Additionally the market in Sunshine Coast has not been good and to sell a new property could be very difficult.

The return on investment seems very low compared to the risks involved, surely if you can access that amount of money if can be invested into a much more profitable and less risky venture.
 
Yes, the risk seems big if the market is not performing.

As for finding a more profitable deal with less risk, that would be handy :)

I would like to do a development as I don't want to hold the property. I'm trying to raise some cash to buy a PPOR in the near future so want to sell and go again until I have a "small" pile of cash.

Having said that, I have no experience with developments, so a less risky option with a bigger return would be good.

I'm happy to hear any ideas anyone might have to achieve this result.
 
Sailesh,

$210,000 for building is spot on. The question I have is in relation the ups and downs you've mentioned. How can that be determined in the current market. Where could I get some indicators for the area?

From what you've said, your clients did well in the area.

Marcio

Trying to read a market within a 12 month period is very difficult. Things you have to look for are stock availability and the potential for and over supply at the micro economic level. Then you have to assess the big picture and determine if the Sunshine Coast will take off over the next 12 months.

Personally, I feel that the inner city suburbs of Brisbane offer better opportunities however, the investment required is much greater.

You should also be in a position to hold the property should things not work out as on one knows what calamity may come up to upset the apple cart.
 
Yes, the risk seems big if the market is not performing.

As for finding a more profitable deal with less risk, that would be handy :)

I would like to do a development as I don't want to hold the property. I'm trying to raise some cash to buy a PPOR in the near future so want to sell and go again until I have a "small" pile of cash.

Having said that, I have no experience with developments, so a less risky option with a bigger return would be good.

I'm happy to hear any ideas anyone might have to achieve this result.

The Sydney market is doing well. There may be opportunities in your own back yard.
 
Yes, the risk seems big if the market is not performing.

As for finding a more profitable deal with less risk, that would be handy :)

I would like to do a development as I don't want to hold the property. I'm trying to raise some cash to buy a PPOR in the near future so want to sell and go again until I have a "small" pile of cash.

Having said that, I have no experience with developments, so a less risky option with a bigger return would be good.

I'm happy to hear any ideas anyone might have to achieve this result.

You also have to ask yourself, who would spend $500K+ on a new place when they could just get one built themselves and choose their own design etc.
Its not like there won't be any more developments in the area in 12 months, if anything, they may even be cheaper with interest rates increasing.
 
market in the sunshine coast

Additionally the market in Sunshine Coast has not been good and to sell a new property could be very difficult.

Bigtone, I'd be interested to find out what makes you say that? Have you got any hard facts to back this claim? This is probably the biggest risk in this investment and if you are right that definitely kills it.

Cheers
 
You also have to ask yourself, who would spend $500K+ on a new place when they could just get one built themselves and choose their own design etc.
Its not like there won't be any more developments in the area in 12 months, if anything, they may even be cheaper with interest rates increasing.

That's an interesting question... although, there have been sales of newly built houses in these new developments. Some people don't want to go through the process of buying land, building, waiting... etc. They prefer to see a new house ready to live in and just buy it.

Sometimes they are not even interested in the premium they are paying in order to buy it. If the market is strong, it sells. As I said before, the issue is finding out how strong (or weak) the market is going to be on completion...
 
property development-5 townhouses Logan Central

I have a DA for building 5 town houses on a property on Garfield Rd, Logan central but not sure whether to build and sell or rent,

rent seems good at present and future capital growth seems attractive

other confusing aspects has been, how many bedrooms. 2 Br seems ideal for renting returns but for capiotal growth my inclination is 3Br. some of u must have been thru this journey, any thoughts would be a great help!
 
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