There are advantages to building yourself. The biggest advantage in a house and land package is the promise of instant equity. Hopefully after paying $185k for the land and $230k for the house your property would then be worth more than $415k and you would have some equity.

If you buy an established house you can collect rent straight away. If it takes you 12 months to build your house that is 12 months without any cash coming in…which means you will be completely paying for the mortgage repayments and any other cost. Just make sure you can afford this.

I see so many people stretching themselves to invest, and being so out of pocket that they can’t afford to live. I understand the principle of saving now and living frugally so you can enjoy life in the future, but I think some people take it to the extreme. Be extremely careful with your cash flow. The last thing you want is to hate your life because you have to work 80 hours per week just to pay for your investment.

Another good thing about house and land packages is that you can claim a fair bit of depreciation on your property once it is build because everything is new…and you can get an extra $7k from the government for the new build FHOG

I disagree with you. You can borrow 70-80% with a standard margin loan, but they are not easy to get for the average person. It is much easier for someone to go into the bank and ask for an 80% loan for a property than it is to ask for an 80% loan for shares.

Yes there are advantages to investing in shares, but you really need to know what you are doing. It is the same with property…the more you know what you are doing the more money you can make.

I think it is interesting that the fund manager who claim to be ‘the experts’ in the stock market can rarely beat the average.

Diversification is protection against ignorance. Diversification is only good if you don’t know what you are doing, it protects you against your own ignorance. If you take the time and learn and get experience then focus will make you the most money. Take Steve McKnight for example…he focuses on positive cash flow and commercial real estate…he is focused and because he is focused he is rich.

In regards to what businessglobal said. I have just been listening to a talk from Steve where he talks about “The Monopoly Theory”. Where you tie up pieces of land next to each other because it will be worth a lot more down the track due to the development potential. This is kind of like what businessglobal has done by buying large blocks of land. They are worth a lot now because of their development potential. So this is definately a good strategy if you have the income to support it.

For me, I need the passive income from property. My income is not huge so every property I invest in at the moment I want the passive income so I can begin to fund my lifestyle through my property and work less, not have properties cost me any money. This doesn’t mean this is the only method, it is just one of many good methods. It depends on what you want to achieve.

As for the testimonials, the site is very new, and thus I cannot provide you with any testimonials. However, we do offer a 110% money back guarantee on our service. So if you don’t like our service, you can get 110% of your money back in the first 30 days. We can’t provide testimonials at the moment, but we can take the financial risk instead of you having to take it.

Interest rates are currently 6-7%. Yes interest rates will go up to maybe 8-9% but this will probably take around 2-3 years. In 2-3 rents will likely be higher than they are today which will help pay for the rising interest rates.
So no they might not be positively cash flowed at 9% today, but in 2-3 years the chances are good that they will be.
Why are you looking at an interest rate of 9% today? If you are worried you can fix interest rates for around 8% for 5 years.

Check out my site for the fees. Currently I have a special on, but this ends in 2 days.

Of course we take into account all expenses associated with property, including even vacancy.

Well if you buy land then you will never achieve positive cash flow unless you develop it. You said at the start you wanted to buy land and just let it sit for 5-10 years and let it appreciate. This will take money out of your pocket every week, which you just said you didn’t want. So I am getting a little confused here.

I can find properties that generate $10-$20/week right off the bat for around your price range (or even under your price range). With some minor renovations and TLC they could be making $50-$70/week. Then in 5-10 years time maybe $150/week positive cash flow.

You can repeat this formula if you can come up with enough capital and enough borrowing capacity.

My site will help you find positive cash flow properties but there is a fee so I would only recommend it if you are in a position to buy, not if you are just considering it.

Good luck

@ the crest – The need to do stuff like that is one of the very reasons I avoid investing in units.

The strata fees not only kill any positive cash flow I hope to achieve, but there is so much politics that would waste my time that I try to invest in houses instead. That way I only the land and don’t share ownership with anyone.

I know of a great deal of positive cash flow properties that are positive cash flow upon purchase and BEFORE tax!

Taking tax out of the picture entirely I know of properties that can earn 5-12% cash on cash return. So yes they do exist and in towns of over 8-10k.

PS. I am talking about houses that are 3 Bedrooms, 1 Bathroom. Not units, blocks of units or other niche properties

@ Sydey – What are your investment goals? How much do you want to make in 10 years?

Richard where can I read about your background?

Are you currently financially free?