Hi all,
I’ve found a good development opportunity but my partner doesn’t want to get into such a project so early on in our property investing career. I believe with the research done including the finance side, it would be a great opportunity even if the site was purchased without getting into the development straight away.
Any suggestions?
Buying the development without building might not be the best use of your money, is the site just land or has it got an existing dwelling? if it is land only it might not be the best option, at least an existing house gives a few more options. Remember there are always lots of options out there so don’t necessarily rush in, if the numbers work and it looks a goer then go for it!
While there are lots of benefits of getting involved in property development their are heaps of risks – especially for beginners. This article will give you some idea of what I mean.
http://www.propertyupdate.com.au/articles/70/1/The-Risks-Related-to-Property-Development
On the other hand buying an investment property with development potential for the future – when you learn a bit more and have more funds behind you could be a great way to go
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 15,000 readers each month.
FREE subscription http://www.PropertyUpdate.com.auYour partner seems not to be convinced so i am asuming there is a risk that you have maybe not disclosed.
Is it 100% guaranteed to return a profit
What are the down sides
How much money is the out lay and can you afford to hold it long term to get the profits you have caculated.
Is there a demand in the local market for profits
What is the guarantee on the long term you will make greater profits including holding charges
If you invest in this project will you miss out on other better opportunities because you have locked your money up.
“profits are better than wages”
D
Originally posted by wealth4life.com:Your partner seems not to be convinced so i am asuming there is a risk that you have maybe not disclosed.
Is it 100% guaranteed to return a profit – Well no, nothing is 100%, but it certainly has very good prospects i.e. the numbers stack up.
What are the down sides – There are many untis built and ready to be built. The property has DA for 5 townhouses.
How much money is the out lay and can you afford to hold it long term to get the profits you have caculated. We are looking into an LVR between 90 and 100%, but hopefully lower towards 80. According to the figures it will be slightly negative until developed. We were thinking a 2 year hold before developing
Is there a demand in the local market for profits – Not so for selling t’houses/units, but rentals are in high demand and we are not looking to sell anyways
What is the guarantee on the long term you will make greater profits including holding charges – As mentioned before, research shows a good opportunity for growth and rentals
If you invest in this project will you miss out on other better opportunities because you have locked your money up. – [i]Possibly true, but the property I believe has a lot going for it and a lot of potential.[/i]“profits are better than wages”
D
You must be logged in to reply to this topic. If you don't have an account, you can register here.
