What’s better? to build or buy an established home??
I’ve spoken to so many people and everyone seems to be biased to what they’ve done. If they’ve built, they say “build build build!” but if they’ve purchased an established house they say thats the best way to go.
Does anyone have an unbiased opinion for me? and any good reasons to back up their suggestion?
I’m 25 this year still living at home. I remember when I was 18 and I had so much money in the bank I didn’t know what to do with it and my older sister said “why don’t you buy some land?”, being 18, I thought “Land? pfft! what do i need land for?” so i bought a car. And am i kicking myself now! Land used to be $60,000 in the area taht i was looking at now i’ve checked its $135,000+.
Can anyone provide any suggestions for me as to whether its better to build or buy an established house? Or perhaps a time machine so I can go back to when I was 18 and buy as much land as I could possibly afford!
Thanks
Hi Almc
We went thru the same dilemma. Finally decided capital growth was more important than a shiny new house out of town. So went with an established one fairly close to Brisbane city. Am happy we did. It’s a lifestyle thing too I guess. I say buy as close to town as you can afford. Good luck!Amlc..
Why land ??
You cannot get a tax deduction on the interest poayments on the land, so to me anyway, unless you build reasonably quick ( 1 year ) on the land, you waste ca$h..
Buying a Investment Property, to me, would be a better option, get a property ( earning income ) with your land content..
For your 1st property i’d recommend buying an established property, that way you learn a bit more about property before you venture into building..
My 2c
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Hi Almc
my late father was a very wiseman he used to say “you have to live in at least 3-4 different homes before you really know what you want” If you want to build to make a home you may like to try this idea especially at 25 you may not have sufficient money for your dream home. The other advantage is that you can profit in many ways on these 3-4 homes so by the time you get to your dream home you are not a slave to your morgage. take it from a slave, its not the way to go.
Redwing,
Don’t be too blinkered. Some of my clients make great money by buying land on $1000 deposit and holding until registration then either selling or build and selling.
Doesn’t fit the pos cashflow accumulation model but it also works!
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi Simon,
Could you please explain ‘holding til registration’ I havnt heard of that. Thanks
sunshineWhen a developer markets land it is unable to be settled until each block has been registered by council. Buyers can reserve their blocks with a small deposit and then these confirmed pre sales will help with the funding for services as the lender will see that the project is a success.
This registration can be 6 months plus after the land is initially put on the market. By this time hopefully all the blocks are sold and blocks are being sold at a higher price.
Works great in a rising market and anytiome where there is a scarcity and demand for land.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Originally posted by amlc_79:I remember when I was 18 and I had so much money in the bank I didn’t know what to do with it and my older sister said “why don’t you buy some land?”, being 18, I thought “Land? pfft! what do i need land for?” so i bought a car. And am i kicking myself now! Land used to be $60,000 in the area taht i was looking at now i’ve checked its $135,000+.
Thanks
Morning MH
I was commenting on this statement of if he bought the land way back then at $60’000 and held it untill the current price now of $135 000 ( over X many years ) then over that period of time, the cost’s incurred on paying off the loan wouldn’t have been deductible, also no income would be forthcoming..
I’ve known people to make great money over a short period of time on land in the recent times, but, in my mind unless your turning a quick profit, or developing etc, vacant land isn’t too appealing..
Not my cup of tea, but not my forte’ either..
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Hi Amlc_79,
I alike turn 25 years old this year and still live at home. Yer well the lifestyle is to good to move out and work is a mere 5 minutes away..well it used to be, got made redundant last week
A mortguage locking me to my job is something i dont find attractive. I never have rented and never thought i would, but lately i have different ideas after reading Steves 0-130 properties.
If i rent i have free money to invest and build my positive cashflow property portfolio instead of it being chewed up by the mortguage.
All the best
Rob
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