I’m actually wondering what peoples’ take is on buying land itself and just sitting on it. I only ask as I was looking through some real estate magazines in Mackay and there is a gutload of land for under $200,000 AUD up that way.
I was also wondering if purchasing the land itself and then leasing the land would be a good income generator?
As in .. I buy the land.. then advertise that the land is for lease so that someone can lease the land from me over 5-10 years and thus they build a house on it etc yet the land/property is mine only the house is theirs (as such) ????
Opinions?
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There is nothing to stop you doing it but whether it would be worthwhile and feasible is a different matter.
Bear in mind that the person leasing the land from you will be unable to gear to borrow using the land as security and thus will mean they will need cash or other security to be able to construct such a dwelling.
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The main problem in having land is there is no income, so your cashflow will be affected.
As there is no income, there are no tax deductions on the expenses to hold the land.i.e loan interest, rates, maintenance.
There was a guy here in L.A renting an acre/s of prime, inner city land to a bunch of home gardeners for years (it may have been on the news in Aus recently?) and he wanted it back for development when the lease ran out, so there was a big stink – a few celebs got involved. The gardeners’ livelihoods were going to be pulled from underneath them.
But that may be one way you could get an income from it – gardeners.Cheers,
Marc.
[email protected]^^ That might be an idea because the land I would buy would most likely be in parts of the country I personally would never live… and if I generated any sort of income from it that would be great.
I could easily lease the land out to some people who wanted “home gardens” yet didn’t have enough land to do so..?? Hmm.. it’s a thought.
So in the end it is the USE of the land that determines its value ??
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Originally posted by GoldCoastGirl:
[brSo in the end it is the USE of the land that determines its value ??
No, it’s the highest use of the land that determines its value.
There was an old heritage building in the Brisbane CBD district a few years back. It had 3 values. As is, listed and unable to be altered, it was worth about 1.5m. If the council allowed development behind it, but had to keep the facade intact, it was worth ~ 5m. If it was able to be knocked down, the vacant block was worth about 11m.
All the same dirt….but 3 wildly different values, depending on what the highest use of the land the council allowed.
Rarely are owners of freehold titles fully in control of their dirt – much to their dismay.
Wishing everyone prosperity!
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