Firstly, I would like to say what a great site this is! I haven’t posted anything on the Forum site as yet but have been following it for a while. I think it’s great that like minded people get together and give each other advise on how to become more successful.
Now my question, we have been (successfully) involved in property investing ( PC+, renovating, etc) for several years now and want to try our luck with making money from buying land (putting deposit down only) and on selling it once the title has been released.
Does anybody have experience with this and advise on how to go about this the best way.
Thanks.Hi Nicolette
It works well if you are in the right area, i live in the SE of Qld and in 2004 i brought 4 blocks of land contract price $88,000 for 1/2 acre fully serviced.
Required 5 % deposit due to title 6 months after purchase.
12 months later land finally titled and on sold 3 blocks for $125,000 and constructed on the 4th.
Thats $37k per block not bad for 12 months with a $5k out lay2nd scenerio
10 blocks of land brought from developer west ipswich QLD 2004 for $18,000 per block with 10% dep required,6 months till titled resold for average of $55-60k prior to settlement
Point to note is that this was done just as the market really took off in SE QLD so you would be very lucky to acheive this at the moment.
Paul Meese
Onyx Finance
[email protected]
0412 850 820Does onselling the land before it settles also raise the issue of 50% capital gains tax as it was sold before 12 months expired or is that only for houses? Does it attract stamp duty, etc?
capital gains is all ways an issue if property is sold within 12 months,but i guess thats just part of the game.
I do beleive we paid stamps as wellPaul Meese
Onyx Finance
[email protected]
0412 850 820Ihad a client that purchased approx 15 blocks off the plan for around $40,000. before settlement they were selling for around $160,000!!!! However, this was during the boom time a few years ago.
Terryw
Discover Home Loans
Parramatta
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Nicolett,
I have a block in oakford WA bought off the plan.There was a 5,000 deposit and the block was priced at 230,000. The titles were due in July but due to the boom this has been extended to around September. However I can’t see them being ready before December. The final release will be starting at 300,000 so we have made at least 70,000 for our initial 5,000 deposit. Not bad but also it seems prety normal at the moment in Perth as the boom just keeps going with people offering greater than advertised prices just to be considdered.
Good luck.
I assume though, that the cost out of your own pocket to finance the loan throughout that settlement period should be factored into profits?
Yes, but I haven’t sold the property yet and I wouldn’t considder selling it at the moment. Not until all the original blcks have been sold by the agent as I am sure they are worth more than what he is asking.
Originally posted by DanielCummins:I assume though, that the cost out of your own pocket to finance the loan throughout that settlement period should be factored into profits?
Originally posted by DanielCummins:I assume though, that the cost out of your own pocket to finance the loan throughout that settlement period should be factored into profits?
Daniel
The loan only starts at settlement. So if you can on sell before hand you will just be up for the interest on the 10% (or lower) deposit – if you borrowed that.
Terryw
Discover Home Loans
Parramatta
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Just send me a blank email, with “subscribe†in subject line.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
This strategy has been good to us…
we bought 3 blocks of land last year in Perth between Aug-Oct.
First block $500 deposit…. bought at $118,000. it’s settling next month and we have it on the market for $250,000.
Second block was a 10% deposit of $16,000. …. cost $160,000 – settling end of this year – currently worth $300,000
Third block – $3000 deposit – cost $148,000 – currently worth around $270,000
[biggrin][biggrin][biggrin] all the way to the bank
it’s been a good year
prices are just so high in perth atm… nicolette – it may be better to look at other states???
aly[exhappy]
Just wanna ask quick questions:
What Titles are they?
How come these titles make the land value much higher? (this is what I observed from reading your posts [blink]
cheers.
Hello skyh
I think what was meant was that the blocks bought were part of a new subdivision and that the individual titles for the blocks bought were not yet ready.
Settlement could not take place till this was done.
The increase in price was not so much due to the title being ready but because of the property boom in Perth. In the time they waited for settlement the prices just went up.
Cheers
ElkaIf I bought a block for 180,000 then sold before settlement for 230,000 what costs would I have to pay. Would I have to pay CGT and stamp duty. What would the difference be if I waited until after settlement.
Any advice will be greatly appreciated.
Thanks
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