Have I made a mistake?

Why not build something and either rent or sell it?

I personally would not like to have a non income producing asset on my portfolio unless I was very, very, very convinced I would get CG in a reasonable short time frame.

You did not mention where the block is, but apart from Perth the market seems to be fairly flat.

Good luck

Hi Meatgroup
Have you made the wrong decision? Not sure, I guess that depends on how you look at it.

Have a look at my other post on the subject of where to find positive cashflow deals, and in particular the bit at the bottom about the questions we should ask ourselves when looking to property for investment purposes.

Here’s my take:
I choose to rent rather than buy a PPOR as a PPOR is a “Lifestyle” choice not an investment decision.

I agree with Bridgebuff on the subject of holding “non income” producing assets.

I also do not buy property in the “hope” that the Capital growth will emerge “someday”. Who knows when that might be.

If you are looking for growth then take up Steve’s mantra of “buy a problem + a solution = profit”. ie do quick renos ( less than 6 months) get the profit and do the next one, thereby building cash reserves.

Alternatively, follow Martin Ayles example, buy an old house, build two or three on the back reno the front one, sell the old one and one or two of the others and pay down the mortgage on the remaining one at the back, rent it out free of mortgage, thereby creating an income as well.

If you are looking primarily for income producing properties, then buy stuff that is positive cashflow or has the potential to be so once a cosmetic ( no not a full on restoration) reno is done then rent it at a higher rent, thereby the value increases and keep it as income.

You really seem to me to need to work out what your PI goals are then then the choices will narrow as to how to get that done.

You are right in that the vacant land also “eats up servicability”. and I’m not sure the ATO will look kindly on you trying to minimise your Cap Gains tax by splitting the profits the way you suggest. I believe that needs to be done prior to settlement if you want to avoid a double slug of Stamp Duty.

With your income and some cash in the bank, it seems to me that more IP’s are very much a possibility and you could be in a very nice position reasonably quickly if you play your cards right with the IPs in the beginning including setting up the appropriate structures to maximse your opportunities – see you accountant for advice on this one.

I also would not be buying vacant land as I see more benefit (read cash) in building on them and selling.

Hope this helps and keep asking those questions, there are loads of people here to answer them. Alternatively, PM me as I’m always happy to chat about this stuff.

Warm regards
Sue