New house and land in Leppington or use buyers agent?

Hi Guys,

I'm pretty new to the real estate game. I just purchased my first investment property in Cambridge Park, NSW (2 bed, 1 bath) in October last year. I did this by laying a 12% deposit. It currently has a rental yield of 5.5%. I'm only paying $35 per week out of pocket against my principle and interest loan, as the tenants pay most of it (if i changed my loan to interest only, the property would be positively geared). In the future, i could put a duplex on this site, as it is zoned to do so.

Not sure if i'm getting greedy, but i want another property. Although, i could probably only afford 5-6% deposit this time round. In saying this, i was possibly looking at purchasing a 300sqm house and land package in the new estate Willowdale (Leppington) thats backs onto camden valley way. I laid a $2000 deposit with a builder at the start of january and am still waiting for the fixed price tender to come through before i decide to go along with it or not. The original price advertised was $382,000, but i suspect (and have been notified by the salesperson) that it does not include everything (including acoustics). So it may come up to $420,000-$450,000. This is a 4 bedroom home with 2 bathrooms and 1 garage. It should rent for a minimum of $400 i suspect. Not sure if rent will be affected being it a smaller house and land package (18sq home).

I'm attracted to Willowdale due to the new train station, its apart of sydney south west growth area, the possibility of a new airport 15km away at badgerys creek, road upgrades to camden valley way, close to m5 and m7 and planned new shopping precinct at leppington including a TAFE and new schools.

So my question is, should i go ahead with this purchase or save my pennies and pay for a buyers agent to find me something that is guaranteed to have higher rental yields? I have my suspicions about buyers agents at times, as i dont always think they are finding YOU the best deal.

Although i have a previous purchase, i have not lived in it for >6months, which means i'm entitled to the first home buyers grant of $15,000 or i am entitled to the standard $5000 grant for new dwellings.

If i purchased an existing property, i think i would need more savings due to excessive stamp duty, where as buying new will only require me to pay stamp duty on the land only.

Has anyone purchased a brand new house and land package and sold it off after it was built or after a year for a profit? Not sure if the market would allow for that.

Any help would be greatly appreciated. Thank you in advance :)
 
Any help or opinions would be greatly appreciated. As i said, i am very new to this all, so i need a little bit more guidance from people who are a little more experienced :)

Thank you :)
 
A couple of things caught my eye:

I'm only paying $35 per week out of pocket against my principle and interest loan...


Why are you paying off the principal?

Although i have a previous purchase, i have not lived in it for >6months, which means i'm entitled to the first home buyers grant of $15,000 or i am entitled to the standard $5000 grant for new dwellings.

If i purchased an existing property, i think i would need more savings due to excessive stamp duty, where as buying new will only require me to pay stamp duty on the land only.

I think you'd better check this carefully.
 
A couple of things caught my eye:




Why are you paying off the principal?



I think you'd better check this carefully.

I suppose i'm paying off the principle because thats how i set up my loan. I didn't realise until recently that having an interest only loan would actually allow rent payments to cover all and more, so my property would be positively geared. I think when my broker showed it all to me, i just thought 'oooh why would i want to pay more for my property in the long run, when i can pay less over the 30yrs with principle and interest?' This will be my first tax return with a property, so it'll be interesting to see if it makes a difference this year or not.

This is the grant i would be eligible for: http://www.osr.nsw.gov.au/grants/fhog

If i don't want to live in the property for 6months to receive the $15,000 first home owner grant, i am eligible for this $5000 one too: http://www.osr.nsw.gov.au/grants/nhg

I'm pretty sure i've been told by OSR before that even though i own an existing home (and have not lived in it for >6months) and want to buy a brand new home, i will still have to pay for stamp duty (which i'm pretty sure is only payable on the land value itself). Correct me if i'm wrong.
 
So i've now been given my fixed price tender for me to decide by midnight tonight. I have two options:

1) $428,798 16sq home 3 bed, 2 bath, 1 garage, 1 alfresco 300m square land- ducted air con, turf to front, letterbox, driveway, fixed price site costs, basix, $2500 fencing allowance, flyscreens, stained timber front door, automatic garage door with 3 remotes, etc.

2)$432,351 15sq home 3 bed, 2 bath, 1 garage, 1 alfresco 300m square land- ducted air con, turf, letterbox, driveway, fixed price site costs, basix, $2500 fencing allowance, flyscreens, stained timber front door, automatic garage door

Originally they advertised $382,079 for 4 bed, 2 bath, 1 garage. That price didnt include everything. But now it seems they've put a smaller home on the land and jacked up the price.

Just need anyones opinion on whether i should go ahead or not. Pros and cons.
 
So i've now been given my fixed price tender for me to decide by midnight tonight. I have two options:

1) $428,798 16sq home 3 bed, 2 bath, 1 garage, 1 alfresco 300m square land- ducted air con, turf to front, letterbox, driveway, fixed price site costs, basix, $2500 fencing allowance, flyscreens, stained timber front door, automatic garage door with 3 remotes, etc.

2)$432,351 15sq home 3 bed, 2 bath, 1 garage, 1 alfresco 300m square land- ducted air con, turf, letterbox, driveway, fixed price site costs, basix, $2500 fencing allowance, flyscreens, stained timber front door, automatic garage door

Originally they advertised $382,079 for 4 bed, 2 bath, 1 garage. That price didnt include everything. But now it seems they've put a smaller home on the land and jacked up the price.

Just need anyones opinion on whether i should go ahead or not. Pros and cons.

Hi I am currently building my first house in leppington at the momment currently in the tender process. I to like yourself purchased in leppington due to potential growth in the area. If you look in areas in Oran Parl and Gregory Hills they have properties going for rent for 400 at miniuim. Obviously I am bias as I invested intrest in the area but I think the new airport along with the train line and a new village centre that is backed by stockland will mean big things for the leppington area
 
Hi I am currently building my first house in leppington at the momment currently in the tender process. I to like yourself purchased in leppington due to potential growth in the area. If you look in areas in Oran Parl and Gregory Hills they have properties going for rent for 400 at miniuim. Obviously I am bias as I invested intrest in the area but I think the new airport along with the train line and a new village centre that is backed by stockland will mean big things for the leppington area

I think Willowdale will be a nice area to live. Unfortunately, i decided to pull out of the process due to the builder being a little unprofessional advertising one thing, then changing it the next. Not to mention taking 2 months to get back to me with a fixed price. Completely annoying. If the company offered me what they originally advertised (18sq home with 4 bed, 2 bath, 1 garage), i would probably have gone with it. I believe making the house 2-3sq smaller and taking off one whole bedroom will affect potential rent, and make it not so much a good investment.
 
I think Willowdale will be a nice area to live. Unfortunately, i decided to pull out of the process due to the builder being a little unprofessional advertising one thing, then changing it the next. Not to mention taking 2 months to get back to me with a fixed price. Completely annoying. If the company offered me what they originally advertised (18sq home with 4 bed, 2 bath, 1 garage), i would probably have gone with it. I believe making the house 2-3sq smaller and taking off one whole bedroom will affect potential rent, and make it not so much a good investment.

I saw those house and land packages and was thinking to myself that was too good to be true. I secured my block of land in the second release and was initially was going to be my ppor but it will investment as soon as the 6 months is up as I will get the fhog. Best of luck
 
So what sort of price are you looking at in total blackenator? Maybe I should consider just getting some land for now too. Have you had quotes from builders? What sizes is your land?
 
So you never lived in the existing property? and are going to use the FHOG for the next one?

By positively geared do you mean for thei interest only? Or does it have massive depreciation?
 
So what sort of price are you looking at in total blackenator? Maybe I should consider just getting some land for now too. Have you had quotes from builders? What sizes is your land?

The land was 250k for 375 square metres I think it may have gone up by now. Was very hard to secure you pay a 1k eoi payment then you get sent a email and once you click on the email you get put on a list of preference. The preference list is allocated by how fast you clicked the email.

To give you a indication how hard it was secure land I clicked the email 2mins after it was sent and was 42nd on the list. When I went to choose my block of land their were only 3 remaining. I was pretty dissapointed as when it came time for me to choose my block of land their were only 3 remaining. As I was walking out a person from stockdale said too me dont be that dissapointed as he had to call 40 other people to tell them they were not able to secure a block of land.
 
The land was 250k for 375 square metres I think it may have gone up by now. Was very hard to secure you pay a 1k eoi payment then you get sent a email and once you click on the email you get put on a list of preference. The preference list is allocated by how fast you clicked the email.

To give you a indication how hard it was secure land I clicked the email 2mins after it was sent and was 42nd on the list. When I went to choose my block of land their were only 3 remaining. I was pretty dissapointed as when it came time for me to choose my block of land their were only 3 remaining. As I was walking out a person from stockdale said too me dont be that dissapointed as he had to call 40 other people to tell them they were not able to secure a block of land.

Puck me. :eek:

Is it really worth the hassle do you think though? If you have time on your side generally a few blocks always come back on the market after a while. Where I live, not far from there the same thing was happening in the early 2000's. I have one of the best blocks in the estate, right at the top of the hill, the guy before me purchased it for $320K and had to bail out 4 years later when rates were a shade under 9%. I picked it up from him for 230k...

I just don't understand the hysteria invloved with buying in these estates. $250k for a 375m2 block out here is nothing to get excited about or camp out like people do.
 
So you never lived in the existing property? and are going to use the FHOG for the next one?

By positively geared do you mean for thei interest only? Or does it have massive depreciation?

Nope, I have never lived in the existing property. I've had it rented out from day dot. I was planning to use the FHOG, but I guess not now since I pulled out and plan on getting my deposit back. I'm quite upset that a 4bed 18sq home was advertised and now it's 3 bed 15 or 16sq. Just don't think it's as worth it.

My property is only positively geared if I have interest only repayments.. But as I'm using a P+I loan I'm $35 out of pocket. No depreciation.. Its a 60yr old home
 
Puck me. :eek:

Is it really worth the hassle do you think though? If you have time on your side generally a few blocks always come back on the market after a while. Where I live, not far from there the same thing was happening in the early 2000's. I have one of the best blocks in the estate, right at the top of the hill, the guy before me purchased it for $320K and had to bail out 4 years later when rates were a shade under 9%. I picked it up from him for 230k...

I just don't understand the hysteria invloved with buying in these estates. $250k for a 375m2 block out here is nothing to get excited about or camp out like people do.

For me it was nothing about the hysteria the impending train line and infrastructure that will go along with Leppington is waht pushed me. Areas such as oran park , gregory hills and even minto have vacant land that is even more expensive then willowdale. If the airport gets aproved and once the train line gets finished willowdale will be smack in the middle
 
For me it was nothing about the hysteria the impending train line and infrastructure that will go along with Leppington is waht pushed me. Areas such as oran park , gregory hills and even minto have vacant land that is even more expensive then willowdale. If the airport gets aproved and once the train line gets finished willowdale will be smack in the middle

Sounds awesome but you are forgetting one major thing...

Huge land supply in this area.

When you buy that block for $250k there is a good 100k of it just tied up in GST, developer costs, marketing etc. The block you are buying is actually only worth about 150k-$170k. Go look at comparable established stuff 10-20 years older close by and you will find they are cheaper than what your build will be because they have had time to depreciate out all those development costs. plus they have bigger blocks usually at least 500m2. Golden rule numero uno, land appreciates, building depreciates.
 
Sounds awesome but you are forgetting one major thing...

Huge land supply in this area.

When you buy that block for $250k there is a good 100k of it just tied up in GST, developer costs, marketing etc. The block you are buying is actually only worth about 150k-$170k. Go look at comparable established stuff 10-20 years older close by and you will find they are cheaper than what your build will be because they have had time to depreciate out all those development costs. plus they have bigger blocks usually at least 500m2. Golden rule numero uno, land appreciates, building depreciates.

Their is a large supply in the area but all the releases are selling out for all of those estates probably except spring farm. Minto , oran park , gregory hills or sell out now when they release land. The demand is their and at the momment that area is probably the most affordable in sydney and thats including penrith
 
Their is a large supply in the area but all the releases are selling out for all of those estates probably except spring farm. Minto , oran park , gregory hills or sell out now when they release land. The demand is their and at the momment that area is probably the most affordable in sydney and thats including penrith

Yeah but everything everywhere is selling now. 5-10 years from now what is going to make a cookie cutter mini Mcmansion different from the one going up 1km away.

If you are going to live in it and money isn't the driver of the decision then go for it, I did. From an investment stand point though anything new you build out this way it is going to take you 10 years minimum to recoup what you put in. It's just the way it is watch what will happen the moment they start putting rates up. Stock everywhere sitting around for 6 months with lots of supply coming through the pipeline.

If you want to buy something out this way get something established you can add value to. At least like that you are not paying over the odds to contribute to Australands marketing budget. Look at Horningsea park or Prestons. Just as close to the rail line and you can still find stuff for less than 500k.
 
Quick search, look at this:

http://www.realestate.com.au/property-house-nsw-horningsea+park-116077919

Under 500k, big block, side access. Nicely maintained home. You could hold it for a few years stick a granny flat in the back, dual income and it's a hop, skip, jump to the rail and 1 minute to bus stop.

You would spend almost the same on a new home or this established one. Big difference is this block is 200m2 bigger and has potential to add value. What is going to be the better buy in 10 years?
 
Quick search, look at this:

http://www.realestate.com.au/property-house-nsw-horningsea+park-116077919

Under 500k, big block, side access. Nicely maintained home. You could hold it for a few years stick a granny flat in the back, dual income and it's a hop, skip, jump to the rail and 1 minute to bus stop.

You would spend almost the same on a new home or this established one. Big difference is this block is 200m2 bigger and has potential to add value. What is going to be the better buy in 10 years?

Thats not a bad property as being fhog I went for a new house because of the grants that are given if I wasnt given the grants probably a diffrent story.
 
Yeah but everything everywhere is selling now. 5-10 years from now what is going to make a cookie cutter mini Mcmansion different from the one going up 1km away.

If you are going to live in it and money isn't the driver of the decision then go for it, I did. From an investment stand point though anything new you build out this way it is going to take you 10 years minimum to recoup what you put in. It's just the way it is watch what will happen the moment they start putting rates up. Stock everywhere sitting around for 6 months with lots of supply coming through the pipeline.

If you want to buy something out this way get something established you can add value to. At least like that you are not paying over the odds to contribute to Australands marketing budget. Look at Horningsea park or Prestons. Just as close to the rail line and you can still find stuff for less than 500k.

The mcmansion I live in was built for 400k 14 years ago.. Now it's worth 950k... Don't be so sure on mcmansions not going up in value.. Anyone who bought mcmansions in the last year has already made 100k..and it's still going up..
 
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