HI , I'm thinking of buying a place in Sydney, the house is quite small and about 30 years old, but the land size is around 900sqm in a nice area. I was hoping to rent the house for a few years and decide what to do then, hoping the land value would have increased and I could sell or re-build. The only issue is that house has active termites at the minute.
Is the large block worth more than the house??
If the house was in the Eastern Suburbs, then yes. If the house is in the outer west, probably not. It is hard to make a valid reply without a little more substance.
If you know what the land is worth, the size of the house (m2) and a replacement cost for a similar house, say $700-$800/m2 you can estimate the depreciated value of the house and/or the land value. Use the general assumption that a house depreciates at 2.5% pa (ie 40 year life) and you'll need to factor in the cost of treating the termites and repairing any structural damage which makes the house unsafe/unnhabitable.
The house is in the western suburbs, it's in a nice area with new developments nearby. The price is in the mid $400's so it's not massive but for the same price there you can get a nicely finised house on a 500sqm block…….
There are still many unknowns however if the house is treated and is liveable (probably with a little work – say $10-$15k max), it may be worthwhile buying & renting it out until you demolish & rebuild. As it has a larger block, it may be possible to subdivide (STCA) or to erect a duplex. You will need to investigate your options with the town planners at the council.
Thanks Scott, there are blocks of 400sqm selling nearby for $350k so it seems resonable. I will speak to the town planners.
You'll need to check out all of your options as highlighted above however if block as are allowable down to 400 m2 you may be able to subdivide quite easily, even better if the existing house sits on the right part of the block. At 900 m2 you may even be able to erect 3 – worth checking out as it makes each block very cheap.
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