I am new to property investing but thought I would seek some opinions from those with more expeience than me in my situation.
I purchased a 1200 square block of land with my brother 3 years ago in one of the fastest growing estates in melbourne. Its very well positoned as its a corner block right oposite a passing creek with nature views etc, near shops, schools and transport and only 20 mins from the CBD.
We both took out seperate loans of which mine is now basically paid off and the block has doubled in price. My brother wants to invest in a rental property and has offered me his other half of the block. I am interested in purchasing the other half as I can see potential developent 3-5 years down the track, as well as a possible first home option.
Obvioulsy i can also save money on fees etc from puchasing privately at an agreed price from my brother rather than market value.
My question is would I be better off selling off my half too and investing in a rental property that would give me some rental income and tax deductions etc, or better to buy the rest of the block for future development?
I am leaning towards the block as I already own half and can secure the rest for a good price, while avoiding a higher mortgage in a softening market with potential interest rate rises. My only expenses are about $1000 in rates per year, as opposed to negative gearing and being exposed to much greater risk.
Any opinions and advice would be greatly appreciated!
Thanks in advance.
No brainer for me.
I would purchase the other half of the block and if you were not interested in building a house yourself, look at what the local council reg’s are on subdivision. 1200sqm should be big enough for two properties.
You could build two houses, sell one or both and make a lot of money.
“Life is not a journey to the grave with the intention of arriving safely in a handsome and well preserved body, but better to skid in sideways, thoroughly used, totally worn out and loudly proclaiming . …… Hell, what a trip !!”
You would probably have a number of options regarding building. What you need to do is determine the cost of each option and the return you will get from each of those options whether it be by renting or selling.
eg 1 dwelling, 2 dwellings, units, commercial ??
It depends where it is and the particular zoning as to what you can do.
Cheers
JeffI’d work out what you want to do with the land, get a DA in and then start building. I’d get a construction loan and build a block of units.
I agree with Rugbyfan.
Visit the town planning office at your local council and see what the subdivision potential is. Ask them what the costs are for the council infill (to provide access, drainage etc), these are the costs incurred for their workers to make your blocks servicable for resale or construction.
Subdivision seems to be the flavour of the month in some outer city areas in Qld at the moment, as land is getting scarce in the major CBD.
Do some research with 3 or more local RE agents and see what figures they come up with if you were to sell 2 x 600m2 blocks.
Duncan
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