Mad-Cat,

I have considered a similar strategy, but from my research, the costs involved would mean you would need to develop the blocks rather than just selling the land.

Firstly, the large blocks that you find must be zoned for sub-division. If the zoning is there, it will be reflected in the asking price. This is why basically sound houses are quite often for sale at “land value” as two or more blocks of sub-divided land are more valuable than a single old house on a large block.

Secondly, you have costs involved in purchasing the property on top of the sale price. The biggest additional cost being stamp duty. Also, settlement fees.

Thirdly, you have costs involved in holding the property and preparing the site, i.e. interest charges, demolition costs and site preparation costs. Applications to councils for sub division can also take some months for approval.

Finally, you have agent’s fees when you sell.

I think you would be lucky to find many blocks that would be profitable once you factor in the above costs.

I would be intersted though to see if your figures disprove my negativity.

Good luck,
Billy