We are looking for our first property and have a problem deciding whether it would be better to buy an existing property or build a home thru a house and land package.
Can anyone let us know the advantages and disadvantages of each?
Thanks
Hi vl
I guess it depends on the area you are planning to build/buy in. We were in a similar predicament also and decided to build. Mainly because in the area we are in the houses for sale are way overvalued for what you get, when we can build the same or better for much less. I guess you could look in to the costs for building in your area and then compare with what is for sale. I like the thought of having exactly what I want in a home too when you build and not buying something designed by someone else. Cheers [biggrin]Is this for investment or your ppor?? You don’t say. I assume it is your ppor. The pros and cons of new or old are enormous. Ultimately it will come down to affordability and your own personal taste (and that of a significant other/s as the case may be!).
One of the things you also need to consider is how handy you are & how many hours you have available to the new home. A house & land package isn’t going to do a retaining wall, the associated drainage, back filling, gardens, garden edging & the list goes on….
I am looking at this as my private property.
We have looked at various suburbs and house layouts and feel that with the cost of some of the existing, we might be better off building on a good plot of land and getting a smaller home (we agreed that don’t need that big a house).
JKM – Looks like there are many other things to consider…wonder if it would be worth the time and money to build…are all those things you mentioned compulsory for a home?
VL, if the land has been cut &/or filled, then a retaining wall may be required. It just depends on how big the cut &/or fill are and whether you can just smooth off. Don’t forget the retaining walls are normally on boundaries so your neighbour is going to want you to attend to it ASAP so that a fence can be erected. Unfortunately it is one of those things that can’t be put off until you have extra money. In some of the estates I have built, they have even had a time frame on how soon after you get the key that your front yard needs to be complete with driveway, gardens etc. Just a few things you need to weigh up. Yes it is great to have a new home that you chose the colours for etc but just a helping hand in making sure you allow for all the costs. Unfortunately most banks don’t allow you to borrow for turf!!!
Building yourown home could save on Stamp Duty.
You get to choose all the fittings, colours etc.
As stated previously, there will be lots of things to do after the house is complete…fences, paths ,gardens, turf, sprinkler system, garden lighting, clothes line, Tv antenna just to mention a few. This is very time consuming and the costs do mount up.
You mentioned that you perfer not a big house, then plan/ position the house so that extra rooms can be added in the future if required.
Hope this helps and enjoy.
hrm
Hi vl,
It depends on whether the property is for personal or investment purposes. However in saying that even if it’s for personal purposes I would always try and gear it towards being appealing to yourselves and the masses so you can ensure it’s easily sellable or rentable if you decide to turn it into an investment or get rid of it later on.
I am currently in the process of building 2 houses. When I worked out the costs I dialled in at least $25k to finish off the place after it is built and you must ensure you dial in rent to live somewhere else (if you need to rent) and loan interest costs while it is being built.
Also factor in the time it takes to build and remember there is no return until it is finished. If you put your money into an existing property which you can use/rent straight away you are getting return immediately.
What I wanted from the build was at least a 20% profit at the end. This includes dialling in tax and using todays sale/rent prices as a guide to what I would get once the property is complete. (even though it’s 12 months down the track)
When I worked out the figures and I didn’t get the return I wanted I walked away.
Hope this helps. If you decide to build I have just gone through all the things to watch for when selecting a block and a house design so would be happy to share this but I’ll leave it for now…
Cheers H
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