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Thanks very much Richard. I checked with the NAB and they seem to need a rental contract in place, so I thought it might be an uncommon thing to use an appraisal.
This is a great idea, and I think it will be the way of the future as land gets more scarce, and first home buyers realise that this is a great way to get into the market. As long as you all have the same vision at the outset, and you investigate it with Council, its exactly what most developers do – i.e buy a block of land, subdivide and build a second dwelling, or build the dwelling first and then subdivide. You can even have the Development application done to show what you plan to do(2nd house and subdivision) and get it approved prior to purchasing the land – but I suppose you'd need to get a solicitor involved with some fancy clauses that ensure you have the right to pull out if its not approved. Approvals can take along time in some councils -3 months is the standard time that it should be done in, but have had one done in 3 weeks last year at my Council! You first steps should be talking to Council to see if its allowed(it will be subject to your zoning etc)
then talk to Real estate agent to see if seller would consider this option. Sometimes Councils are not very helpful. I n this instance, you can talk to a specialist in these types of things – a PLANNING consultant can help you. They basically know all of the legislation back to front and could possibly even help you find a suitable site or tell yu what to look for. They do cost a bit though. Good luck!Try looking on http://www.byohouse.com.au about it – maybe you can find some info there.Check the forum out. you might be able to get advice there –
HI Kiwi Fulla, any chance you had a few spare moments to share a few thoughts on lease options. I read your post above, and it sounds interesting, but I don't know alot about the process, and risks. If you care to share, that would be great. Thanks
The best way to start is to find out as much through your Council LEP(local environment plan) /DCP- you can probably download from the council website in the area you are looking at, and also go into the Council office(or call) with the address, and see if its suitable for a subdivision. Go in and have a chat to a Council DUTY officer – this is the best way to start learning about it. There are many factors, some of whcih are the zoning of the site(council will advise this and there are zoning maps available also), then there is the size of the site(is it big enough to subdivide), frontage of the site(is it wide enough), also many other things to consider if it already has a building on it. You may need to pay for access to be built to the site also(i.e – driveway or road) First step should be to talk to Council who will point you in the right direction. To subdivide you may need to provide new services to the second block, have plans drawn up(by a draftsperson or architect, and engineering consultant for the services) to submit to Council for approval, and get an idea of the fees involved for the provision of the services to the site-maybe contact a local builder for an estimate once you know what you want.
Thankyou everyone. Yes I checked the ATO website and its a similar example. Very helpful.
Just thought I would add my 2cents worth- the best" priced "builder is not always necessarily the BEST builder(or cheapest in the end). If your contracts, specifications and contract documentation(council drawings) are not watertight and compatible and descriptive, then it leaves the client open to lots of claims for variations to the original quoted price. It also depends on the integrity(and honesty) of the chosen builder, in how much extra they would charge for variations(which inevitably occur on most jobs for one reason or another). Does your company offer any guarantees for the builders quotes you supply – i.e. say if the chosen builder went bust, what happens then..is there any liability on you for recommending the builder through your service? What services do you offer to clients to help them choose the builder – is it best price only, or do you go into details about each quote, and explain to the client how they vary(if they do) and advantages/disadvantages etc. Are the builders chosen to quote by your company or do they pay a fee to your company to quote, and so it is open to anyone? It still sounds like a good concept though. I know there are a few companies around making a good living from it.
Don that sounds like a great deal, BUT i have heard that there are massive new housing estates planned to increase the existing housing stock which is currently in short supply around Karratha. There is a new development which is currently in the planning stage, but has a timeline of completion for a few years only, once construction commences. Would this new development mean that housing prices will drop considerably? Also, is this why there is such an enormous amount of houses/units for sale in this area, which seem to have massively overinflated prices due to the surrounding industry renting them out? I am not sure, but think there's a good possibility that housing prices may plummet dramatically once the new housing developments go ahead, and there is a large amount of new housing available for purchase? I was tossing up investing there at one stage myself. Anyone else got any ideas/thoughts on it?
I think there was lady around the melbourne area who built a 35sq.m(approx from memory) home (with a bathroom and bedroom in the roof space – sort of like a loft space) , not so long ago. She built it from mud bricks – and owner built it herself. It coost her $20 K to build! So that is the smallest house I have heard of. (and the cheapest!)
Thankyou Scott. I see what you mean, but I was thinking that I may be able to claim the losses each year (in my usual income tax return which was prepared for my day job) somehow? Would it have reduced my taxable income if I made a loss of 10K on the vacant land each year? Thats more the point of what I was hoping to claim. I'm not sure if the system works that way as you said, when I made no income fromt he actual property itself?
Thanks Scott. who si the best person to talk to about this finance arrangement? A solicitor? And is this a common thing real estate agents know about? mY RE agent is a young one. Also because the deeds are held by the financer, is it like anormal bank loan, where I can renovate the property(or demolish it as I plan to) and do what I want even though the deeds are held by the financer? Thanks
I posted this in the wrong section I think – so have reposted in the finance section.
