House and Land Packages

Hi All,

I'm currently looking at various suburbs for potential IP purchases and with one suburb that I am looking at, the medium price os around $360k, however, house and land packages in the suburb are around $390k.

Given that the H & L packages would have greater depreciation and write-off benefits, most likely less maintenance issues and possible appeal to tenants due to newer fixtures and fittings, can I please ask what other factors I should be taking into account when considering whether or not to purchase a H & L package.

For example, some H & L packages have less m2 area and thus a limited opportuntity for redevelopment down the track.

Any comments would be greatly appreciated.

Zargor
 
Hi All,

I'm currently looking at various suburbs for potential IP purchases and with one suburb that I am looking at, the medium price os around $360k, however, house and land packages in the suburb are around $390k.

Given that the H & L packages would have greater depreciation and write-off benefits, most likely less maintenance issues and possible appeal to tenants due to newer fixtures and fittings, can I please ask what other factors I should be taking into account when considering whether or not to purchase a H & L package.

For example, some H & L packages have less m2 area and thus a limited opportuntity for redevelopment down the track.

Any comments would be greatly appreciated.

Zargor

Holding Costs!!!!. Be prepared to start forking out paying for the loan 6 months before finding tenants. (4 months likely in Brisbane)

Cheers,

F
 
..........For example, some H & L packages have less m2 area and thus a limited opportuntity for redevelopment down the track.


Zargor

HI Zargor,

that's why you are paying a premium. You are paying the builder(s) or developer(s) profit. They have done the work.....you benefit from a brand new box, however expect lot sizes to get smaller and smaller as communities densify.

If you want the upside of value add later by subdividing yourself, then buy the largest (appropriately zoned) block you can with a second hand rental box.

Less rent return initially and probably not much deporeciation, however more scope for land growth and value add subdiv later down the track if that is the strategy you desire.
 
HI Zargor,

that's why you are paying a premium. You are paying the builder(s) or developer(s) profit. They have done the work.....you benefit from a brand new box, however expect lot sizes to get smaller and smaller as communities densify.

If you want the upside of value add later by subdividing yourself, then buy the largest (appropriately zoned) block you can with a second hand rental box.

Less rent return initially and probably not much deporeciation, however more scope for land growth and value add subdiv later down the track if that is the strategy you desire.

Player has it spot on, but I'd also like to add that older homes tend to also be in more established areas and so are closer to amenities such as transport hubs, shopping centres, schools etc. Something to consider.
I'd rather buy an established IP on 600sqm of land for the same price as a newie on 300sqm any day.
 
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