Hello,
My PPOR is on a 5 acre property approx 15k from the main township. The zoning is Rural however the area is considered Rural Residential. In my street there are 5 properties all about 5 acres but there is also a couple of large farms that surround our street.
I am at the end of the street and my neighbouring property is 100acres of scrub vegitation.
I have 3 horses and find that my 5 acres is just not enough to sustain them through our dry season. My neighbour is an elderly gentleman (doesnt live on the property, no home there). He is a wealthy fellow who was given alot of land post war (as were most of the land owners in my area). He has very kindly allowed me to fence off part of his land to run my horses. I have been doing this for a few years now.
I have had coffee with this rather educated old man and his intent for the property is to sell it to a developer for the sum of $3.5m. Although this is well above current market value for such land and I cant see a developer paying that in the near future (the land is very hilly and rocky so would be expensive to develop, there are easier options for now, however in future he just may get it).
Now I dont have $3.5m. In fact I have very little but I would really like to able to purchase a section of his land in future. Say 10 acres, that joins mine. Even if he was agreeable I could not purchase this now as I cannot afford to make repayments on a property that earns me nothing.
I was wondering what people's thought might be on how to get first option on this or rather a section of this property.
If you were in this situation would you approach him with an option offer? A contract with super extented settlement?
Or just sit tight and hope another 10yrs passes before you are forced to purchase the land that you currently use for free!
(p.s. I would be devastated if my other neighbours got in before me and secured the land next to me)
Bump, I slipped out of the headlines way too quick, anyone got any suggetions. ta
I’d say he knows what he wants from the site. $35k/acre isn’t ridiculous but the timing has to be right. I think you’d have buckley’s of getting an option which would require him to subdivide & reduce the development potential of his site unless you were prepared to pay above market to secure the additional land & compensating for lost development potential.
Free agistment is your bonus enjoy it while it lasts.
PS: hilly & rocky are what rural residential is all about – the degradation of farmland & loss of productive land for the satisfaction of developers.
Thanks for your comments Scott No Mates.
I guess I was thinking that he is unlikely to do anything with this site for at least a few years. I know he does not indend to develop the land himself (too old) He is however thinking of the value of the land in development potential and as such is keen to find a developer willing to take it on (that said, it is not on market and he is not actively seeking a purchaser). Thus my reason for thinking it will be a few years before anything happens. Not to mention that my area's property market has slowed considerably. Many residential land projects are on hold and there is plenty more on the horizon that is better located and easier to develop and make money on that this one. (cheaper for the developer to purchase too).
I was thinking that if I offered him $10k and a option. He has $10k that he didnt have before. If the option is 2yrs and I am in a position to buy in 2 years then he gets a sale. If not he keeps $10k. Therefore the $10k is basically a sum I pay him for the first right of purchase on that section of land..
Think your right though, perhaps I just need to befriend him so that he gives me the heads up with his plans. Think I have a bit of competition in that area though and is a bit hard as cane growers here still together. (not that this is cane land but the group of people are rather clicky)
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