Has anyone look at the new sub-division being developed by Walker Corporation on the old Kew Cottage property located off Princess St in Kew? There are about 75 lots with house & land package ranging from $1.1 million to $1.4 million.
What should one consider are the factors if one look wish to buy in with a view of a residence and yet have reasonable capital appreciation?
Your feedbacks would be most appreciated.
Hi DanielKTan.
Thanks for your post. That site has been in the news for a long time since Kennett sold it off many years ago.
There is no doubt that the site is in an excellent location – clost to town, transport and parks.
If looking at the site for a residence, the key issues I can see are:
1. Affordability
2. Abiliity to borrow
3. Is it where you want to live for your lifestyleA common misconception is that a home is a property investment. It’s not. A home is a lifestyle choice, and so any financial gain is a bonus as opposed to an expectation.
That doesn’t mean you should be ignorant to the financial perks, just understand that a home needs to suit your lifestyle needs first.
Finally, remember that interest on a loan used to purchase a PPOR is non-deductible. Therefore, assuming you buy a $1m site, build a $500k house and finance the lot on an 80% loan at 8% interest, you would pay $96,000 a year in interest.
Assuming you paid an average of 35% income tax, in pre-tax dollars you would have to earn $147,700 just to meet the interest cost (and that’s before loan repayments).
Food for thought!
I look forward to seeing more of you on the forums.
All the best,
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
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