landbanking for furure estate

Hi all,

I've come across a very good deal for a 3 acre block (a little over 12k sq/m) on the edge of a town which includes full town services and the ability to subdivide it. A very good price too.

My immediate thought is to break it up as community title and build a gated retirement village for independent retirees on it and charge a body corporate for upkeep of the grounds etc. The town concerned is relatively close to Sydney and close to transport facilities etc.

But then again, i could subdivide it and sell off the blocks separately and/or build on the blocks to sell off individually.

For those that know me, a gated community is my style and thought for the future - as with a community for independent retirees. This is current knowing that the NSW government is proposing in offering stamp duty exemptions for over 65's who are downsizing and buying off the plan.

So my question is, what would be the best future outcome? I cannot afford to develop this block now and am willing to hold onto it for a few years. But would i be better in doing a gated community for independent retirees as community title or breaking it up and selling it off separately (after i subdivide it all).


Thanks


g
 
But would i be better in doing a gated community for independent retirees as community title or breaking it up and selling it off separately (after i subdivide it all).

With respect, you have not given us much on which to base an opinion.

What numbers are we dealing with here? :confused:
 
With respect, you have not given us much on which to base an opinion.

What numbers are we dealing with here? :confused:

I'm a bit hesitant in giving the numbers at this stage as it is still early days and I'm still brewing the ideas in my mind. The blocks concerned are advertised but I've been offered a discounted price through the agency selling them. They are repossession jobs through a bankruptcy case.

At this stage, i can say that the blocks are well under market value. So even if i sat on them for a few years then so be it. The problem is, i'd like them to be returning money soon.

FWIW - i initially wrote of one 3 acre block, but there are 3 separate 3 acre blocks.



thanks


g
 
The problem is, i'd like them to be returning money soon.

The problem is, blocks of dirt don't do that!:eek:

Presumably it will take some time to get a gated community application in, approved and (possibly??) rezoned for such a use? Might be a bit quicker getting a straight sub-division through?
 
Be warned.

I'm about 80% way through a similar exercise to a DA. The "hole" has consumed about $100K so far. We're now scheduled to take the council to court. You're entering a world of rip-offs after rip-offs. Consultants for ALL manner of things... noise control, storm water, sewerage etc....who will ALL gladly take your money. Hope and pray there's no heritage issues. These don't surface until your application "wakes" them up. Councils who make "strange" decisions. Your only final resort is legal action. This is an expensive, frustrating game. Be warned.
...and it looks so easy !!
LL
 
Unless you have plenty of free capital land banking is for the wealthy in my opinion....rarely does land create any real value or income until resold during the best timing in the market.

Things to consider if you intend to develop at a later date and sell off individual lots:

1. todays development costs will definitely be way higher in the future

2. Working on todays profit margins on developing will not be the same % wise as say in 5-10 years? Higher or lower profit margins, who knows.

Unless you steal the block and are assured of a quality capital return on your investment in a good area its russian roulette land banking.

Sometimes you have to look at the big picture and ask yourself: can the money I have to pay for the block be better spent elsewhere for a better return?

If your hoping to generate revenue from the block go with bricks and mortar cause if you buy the block and hold for 5-10 years your stuck with outgoings continually unless you are prepared to be patient ...No guarantees with land banking but well worth the rewards if it doesnt tie up all your capital.

Best of luck......research, research, research!
 
If you split some blocks off now is there any money in them?
Could you do a bit of both your options? Split some off now to free up some profit so you can hold the rest to develop later down the track?

Gools
 
Top