Hi all
Would like to get some feedback. We bought a block of land in the Dunsborough Lakes estate near Margaret River in WA. The sale will go through in December. We thought of building a home on the land and then renting it out. The land will cost us $127k (393sqm) and the house will cost us about $132k. It is likely we would get a rent of around $240-260 per week. The same blocks of land are now selling for around $190k. Do we sell or do we rent??
Thanks
SimonWell Si,
If you develop the land, you gotta wait for the house to be built. I dunno about down that way, but up here in Geraldton, builders are booked up for the next two years. They wont even look at your plans.So maybe that’s a hurdle for you too. Finding a builder. Plus the bricks…(There is a major brick shortage in WA)
There is not certain answer. You have to work out what you can cope with.
Steph.Success is 1% inspiration and 99% perspiration.
Simond, you mentioned that the sale will go through in December and has added 63K in value. When did you by this land?
Zen,
Dunsborough has been “going off” for some time so they may have had it long.
Simond, it may depend what your long term goal is, do you want the cash as deposits on something else or are you looking at capital gains with the tax breaks that a negativley geared property will give? As well as depreciation? Think about what you long term goal is and that may help you decide.
Regards
PKHi all
The land was bought back in Feb. 2004 and they are continuing the subdivision at the moment. I feel Dunsborough will continually gain in value, though for rental it will still yield about 4.5% to 5%. It may turn out to be very good for capital growth as that area of the Margaret River is becoming increasingly popular.
Our long term goal is to have a property that will have good capital growth and still yield a decent rental return. It seems there is a shortage of good 4 bedroom houses to rent in the Dunsborough area. The demographics show that about 50% of the population are renters. A 4 bedroom house in the same estate as ours is currently on the net for rent at $260pw.
Thanks for all your feedback.
SimonIf that is the case then don’t sell what ever you do. Build or keep the land. Doesn’t matter if you can’t claim the interest rate expenses now provided you can afford the repayment. Doesn’t make sense selling your appreciating asset.
Does it have ocean view? It’s a smaller size block than average Perth blocks.Hi
No ocean views. It is part of the Dunsborough Lakes Estate, and it’s built around a golf course. Our lot is overlooking no.8 hole (whatever that means) and therefore no other dwelling can be built in front. We have views right out to the mountains. I agree…it is only 390sq mts and a small block, but I guess hence the price.
Having read all the ideas, I think we will keep it and build on it eventually.
Thanks for all the input.
P.S they are still selling blocks there.
Simon
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