Rural - Residential costs & depreciation

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From: Will G


I am interested to hear any stories of buying small(up to 25 acres) Rural-Residential(30 minutes from capital city) properties.

Are insurances more expensive due to bush fires etc... ?

Are water tanks, pumps and septic systems included in depreciation schedules ?

Are costs of public road repairs in the vicinity of the property the owners responsibility ?

Thanks,
Will
 
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Reply: 1
From: Michele B


Hmmmm Will, no takers. Well I'll try. I have a huge holding a long way from a capital city which costs a lot to insure mainly because it is so remote. Also, I have to insure my fences which entails a 'farm' policy plus maintain public liability insurance in case a trespasser falls off a cliff or I inadvertently set fire to my tenant farmer's crop. Not normal resi issues.

Most areas are administered by a council so road maintenance is not your problem. However control of noxious weeds definitely is, INCLUDING along your road verges. So in effect you are required to maintain property which is not actually yours.

Depreciation is standard and you may also find it's not easy to finance larger holdings. Kellie? Rolf?

I also have a small rural/resi holding 30 mins from a capital city in a bushfire zone. Insurance has not been a problem as long as fire-fighting equipment is available and certain fire regs are met eg) metal flyscreens have to be used rather than the sort that melt and allow embers to enter. Again, I'm required to ensure that all prescribed weeds suffer a slow and traumatic death both on my land and adjacent verges.

Hope that helps!
 
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Reply: 1.1
From: Will G


Thanks for the help Michele. I haven't purchased a rural property before and are trying to calculate the kinds of costs I may be up for.

Have you had any issues with public liability insurance ?. There has been a lot of publicity in the press in the last month or so.

What kinds of weeds are classed as 'noxious weeds' ?. Are you talking for example 'Pattersons Curse' blackberry etc ?

Have you had experience with Septic tanks and the costs associated with regular maintenance ?

Cheers,
Will
 
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Reply: 1.2
From: Rolf Latham


Hi MB

Up to 25 acres rural resi is a snack, to 40 its ok, beyond that the LVRs become pretty sick, thats why vendor finance has been commonly used for the deposit components of many large acreage properties.

Ta

Rolf
 
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Reply: 1.2.1
From: Michele B


Thanks Rolf

Will G, seems it's quite difficult to insure an IP on more than 20 acres - strange that the size of land has a bearing on risk rather than proximity to towns etc. Haven't encountered public liablity issues yet, other than escalating premiums.

Weeds are area specific - things like African Boxthorn, Horehound, False Caper, Lincoln Weed, Skeleton Weed etc etc.

Septics don't need much attention if they aren't abused. I think you're meant to empty them periodically but I never have!
 
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