Yes that is a good strategy.

DFT = Discretionary Family Trust.

Yes Shan a subdivision will unlock value. But it takes time for the subdivision process to finish. Since you are looking to construct on the houses as well you might want to consider building first, then subdividing later. Subdividing first then building is not very efficient.

Transferring property between siblings will probably incur stamp duty. Also consider that if you borrow in joint names it will reduce your borrowing capacity on other properties as they assume that the entire debt is yours, although you only get half the income.

What’s more important to you? You obviously value the smaller block due to its location and features – so I would think it best to buy it in that case. A good investment is not always about the land content – location is the primary determinant of growth I believe.

Sell it and get rid of it. It is a crap investment, full stop.

Here in Victoria the FHOG for an established property is only $7,000 – that is hardly anything. The tax deductions and rental you get from the first 6 months of holding an investment property far outweigh this paltry sum – particularly for higher value properties.

I always advise my clients to invest first, purchase the PPOR later. With an investment you have a much better budget, and will be able to purchase much better quality property. No point buying a dogbox 1 bedroom apartment that is going to have limited growth, in my opinion, if that’s all you can afford.

Josh,

Don’t focus too much on the FHOG or FHO Boost. These are just gimmicks – and developers of house+land packages have inflated their price by the size of the grant anyway!

For an investment I would stick to purchasing decent properties in good locations. What is your budget? Have you arranged finance?

Yes as Terry said you can do it. Not a problem as long as you can service the debt.