hi all i was wondering to nite if in the building market ie knock down and build ,is there a cheaper time to build maybe when the market is slow ,and no one is building ,,is it in winter ,is there a cycle , do companies have discounted time when they need buisness would any one know any thing about it any comments would be great [
]Hi trying
Building is an effective way to acquire property at wholesale prices, especially if you do a bit of hands on stuff like lay your own turf, fit your light fittings, source your own floor coverings and save a dollar where you can. The down side is that it takes time from initial purchase of land to the hand over of building, then more time to complete the bit you might do yourself while all the time you have to pay interest on money already outlaid (with no returns). I have done this 4 times now and will do it again because I enjoy it and have made a dollar.
The cycles I have observed are as follows
* Just before GST you could not get a builder and if you could you had to pay a lot more than 10%
* Just before FHOG – Good time to build
* Just after FHOG – still good time because industry is geared up and efficiently rolling on
* Now – Very hard to buy well priced land in good quality area
* Future – (my thoughts) a removal of FHOG or down turn in market (eg rise in interest rates) will cause major problems in the building industry, as has happened in the past.The problem is when the industry or property market is in its perfect part of cycle to act will you be ready, and if we wait for its perfect peak or trough how much has inaction cost us?
As for seasons, normally the building industry shuts down over Christmas for 6 to 8 weeks, the builders I use worked all but 2 weeks last Dec.Hope some of this might help
“Don’t forget the price of inaction”
Keythanks for your comments ,,i bought a peice of land, may ,will be a year ,it was cheap at the time and i purchesed it just off the flyer ,so i thought what the heck only 49,000 at that time i was purchesing a ip in the same area so i got one loan for both ,but when i had a good think about it i was not to sure if i had done the right thing ,because i did not even do any reserch ,even for the ip too which has a tenant in already ,so as it turned out ,its been 10 months now my ip has gone up heaps [
]and wouldnt you know it ,the peice of land 880sq is now 120,000 so i caught my breath and thought ,some one up there likes me []not knowing whether to sell the land or not ,after discovering this forum my mind has been ticking and now i am soon to go to the council to get an ok on 2 double stories on this peice of land ,its my first time building so ,,,,,,,here goes ,,, ps i intend to rent them out ,and yes they will be + gearing ,so you see ,thanks to this forum i have a little bit more brains now ans feel more confident to take some risks ,ps property investment is addictive ?am i right or is it just me []i have heard on the posts that you can buy below market value, is what i am about to do ,is the answer to below market value ? or is this not so
i have heard on the posts that you can buy below market value, is what i am about to do ,is the answer to below market value ? or is this not soThat depends…
Buying “below market” means that you bought something (land/house/unit etc) for a cheaper price than equivalents at the same time. So in this case as you’re not buying a house, the question is whether you bought the land below value. The answer to this depends on how much blocks of land with the same features (location, size, ameities, views etc) were selling back then.
Hope this helps!
Quasimodo
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We are all but half formed images of our true potential.
___________________________________________________________________________It sounds like you are doing really well, being addicted is good. You may or may not have “bought” at ‘below market value’ but you have done nicely anyway. I hope you do well at the council, sometimes a lot of time, energy and money goes into the planning stages before you feel you are going forwards, the council will probably have some hoops for you to jump through but you have got a great idea so push hard on all the doors.
Key
OK,
This might be arguing a finer point, but I don’t hink you can actually buy below market value, you can only by at market value, since what you pay is market value.
However, you may be able to buy below assigned value… such as improved land value, independently appraised value, below median house price value etc.
There is a fixation with trying to buy at a huge discount.
I look at the issue slightly differently. As an investor I have a price I can pay where I make money.
Depending on what that price is vs. the sale price determines if I put in an offer. I don’t see much value in low-balling as it results in lose-lose outcomes.
However, I will try to negotiate a reasonable discount on the sales price to improve my return.
HOWEVER, when I find a deal that makes money I don’t argue the finer points over a few hundred. If I make money and so does the seller then no probs… it’s a win-win sale.
Bye,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Good point Steve.
It’s nice to hear that not everybody advocates mass lowballing which is a process I’ve long hated exactly because of the lose-lose nature you mentioned. I’m still looking for duplicatable methods of purchasing properties that will both help raise my ROI as well as provide win-win deals for all concerned. Most of what I *have* found has been in the form of finding “alchemic” value (to borrow a phrase from Paul Zane Pilzer), that is taking something worth more to one person and less to another and using that difference to make a deal that creates value out of thin air (almost!).
I suspect that there’s still huge potential in working with terms over price. I’ve seen vendor financing used to rase the ROI (by lowering deposits necessary) but I’m wondering what terms could be used to actually raise *cashflow* in a win-win way.Any ideas?
Quasimodo
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Funny how has a way of answering all of our fearful questions…
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]
]and wouldnt you know it ,the peice of land 880sq is now 120,000 so i caught my breath and thought ,some one up there likes me [
]not knowing whether to sell the land or not ,after discovering this forum my mind has been ticking and now i am soon to go to the council to get an ok on 2 double stories on this peice of land ,its my first time building so ,,,,,,,here goes ,,, ps i intend to rent them out ,and yes they will be + gearing ,so you see ,thanks to this forum i have a little bit more brains now ans feel more confident to take some risks ,ps property investment is addictive ?am i right or is it just me [
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