Hi all,
I was wondering whether any of you forum folk could offer advice on the following.
I purchased 3 acres in seaside Paynesville, Victoria recently and now have $50K in equity. I’m now onto the positive-cashflow bandwagon and am trying to work out how best to make use of this land as part of an investment strategy to accumulate investment properties. Do I (a) leave it as is and use the equity to borrow against for an investment property; (b) sell the land, pay CGT and costs, but end up with a smaller cash lump sum ( less than the equity )to buy an investment property or (c) do I consider building a small house on it, renting it out, and claiming tax-deductions to help get as close to positivey geared as possible.
Thanks folks.
PS. If I do keep the land as is, does anyone know how I might generate an income off the land so that I can classify the interest payments as tax-deductible…or am I off with the pixies on this thought train?
Thanks all
B-goodFish
Well in my opinion I would sell the land.It is not generating any sort of income and therefore represents a bad strategy.You have to have your money working for you.Put the money into +cf property and dont worry so much about growth like everyone else.Go for the returns to start off with at least that way you have your foot in the door and your money is working for and not against you.Theres only one way to get rich and that is to emulate the people who have already done it.Best of luck.
Russ.So many +CF properties in Western Australia.Let me help you. And we can achieve a win win situation.Russ.0438 659 411
What about development opportunities?? Find out how much development the council will allow, just another way…
Rgds.
Lucifer_auajlit 2
Just to throw my two bobs worth in. If you have sufficent services at your property you can buy a pretty well maintained property to move to the block of land. You can get them anywhere from nothing to $5000 depending on qaulity. Say a house for $5k with permits, transportation re blocking at your property services and a repaint e.t.c could set you back around 15k- 25k. Much cheaper than building. would be +ve. and you could always get rid of it to build on later. You are turning it into a income producing asset and will also increase the cap value. First talk to council, ring a valuer for a chat.
But this is just an option hope it churns your mind a bit. Thats what these forums are for.
aluminatiI agree with Aluminati, if it is growing and you can make it +cashflow/neutral by putting a cheapie house on it, why not keep it?
Further down the line you may have the opportunity to subdivide. We’ve all heard the stories about someone buying a large piece of land for next-to-nothing and years later being offered millions for a development site.Especially seaside towns.
From a finance point-of-view it will be much easier to leverage off and use the equity as a rental property as apposed to a rural, vacant block of land – not many lenders you can talk to about that and even tougher if you go into LMI territory.
Good luck!
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner’
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