Yet another FHO confused – 14*32 (448m2) for $310 vs 16*32 (512m2) for $375

CALLING ON GURUS here to guide yet another FHO :confused:

I’m curious if you think extra 65K is justified to move from 448m2 to 512m2? I’m going to be borrowing this difference so when time comes to sell (single story on both 448 & 512) how much more do you think one would pay for a house on 512 m2?

If I buy the 14m block then I have the funds to build a double story. However with a 16m bock I will have to build a single story. At the end of the day both will cost the same I think. From a resale perspective do you think a double story on 448m2 (I will get a bigger backyard) will sell for less; more or same as compared to a single story on 512m2?

Personally I love single story house & don’t know where I will move later because this really is the best I can afford at this point in time. But as everyone says I will sell this house someday. I’ve always heard buy the best you can afford & bigger block because it’s the value of the land that appreciates and not the house. Going by that should I be borrowing 65K more? Any suggestion on how I should approach this question?

I can afford the repayments on both so what else should I ask myself? We are also happy with the size of the house on 14m block. So only motivation to go to 16m block would be for better returns at the time of selling. Even if 512m block sells for 65-75 more I don’t think I would have made any more money than buying the 418m block. What am I missing?
 
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Let me guess - you're buying in a new estate, on the outskirts of Melbourne. If so, then at the end of the day, you're buying from a developer who is setting the prices - not the market, and, as such, their marketing and sales fees are loaded into the price. So really, the 448sqm block may really only be worth $50k less than the purchase price.

What you should be researching is finding out the resale value of these properties and what the target demographic is. If it's a suburb full of two storey houses with small backyards (and are such that people want to buy), then build a two storey house with a small backyard.

It really comes down to the build cost. One block of land may have huge amounts of rock that need to be blasted out. Or it could have reactive soil. Or a horrible incline.

[As an aside: I bought a block of land - 850sqm for $225k that was reasonably flat. A block around the corner from me was 1250sqm and only $185k. The catch was that the 1250sqm block had a 1 in 14 (from memory) incline that would have taken some major engineering work to get out of the ground, and hence more $$$.]

If you love a single storey - then go build it, and then work more on acquiring investment properties and less on what your house *might* sell for in an indeterminate period of time. Just remember - if it's a new estate, then prices won't rise as fast as established suburbs, due to supply and demand.
 
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I agree with MJA, forget the growth on this property as there will be very little (comparably) and built what you want for personal preference and buy some investments in established areas that will have much more growth.
 
MJA speaks the truth :)

No difference in land value at all IMO. Both sizes of land will take a double storey house.

Houses are typically valued on # bedrooms, # bathrooms & # car spaces.
Double / single storey does not much come into the equation.
 
I wouldn't touch a double storey house with a bargepole, but that's just because I have a toddler and another on the way. If I had older kids or no kids it would be a different matter. Old fogies tend not to like stairs either once their knees and hips give out.

Why not just build what *you* need without trying to think what someone else will want to buy off you 10 years down the track?
 
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