6 Months ago I bought a block of land at Forrest Beach, FNQ for 107.5k. I had saved up 20k and used it as a deposit for the block as well as covering any expenses. This resulted in a 93k PI loan and the block of land.
I have since paid a extra 10k into the loan reducing it to 83k (about $800 a fortnight goes towards my home loan) and plan to continue doing so.
I just want to know what I should really be doing as I don’t think this is a very efficient setup at all. I am on ~40k a year and have very few expenses.
Hi..what was your plan when you purchased the block?
Where is the land? Is there a market for rentals?Kylie S
Mortgage Consultant & Property Investor
0412614965
[email protected]Did you buy the property in the hope of CG? Or do you want to build on it for investment or PPoR?
I think the important thing is that you have a plan and not just a wait and hope attitute.If you do not think that the property will appreciate and you do not have an improvement plan, you would probably be best off to sell and cut your losses.
I know that Steve does not like land, as it is not producing income. Your property looks like the worst possible negative geared property.
And I do not even know if there are any tax deductions, as you cannot claim expenses against an income.
All the best
When you purchased the block what did you intend to do with it?
By the way thats a nice part of Queensland with a decent rental market.
All the best
[specool]Sorry, I posted this in a hurry for work and realized how much info I left out too late.
The block is 2000sqm which a little above the average block size.
There are a fair amount of Land Developments going on at Forrest Beach
When I purchased my plan was either to Divide the block at some later date or build a few townhouses/units on it.
I bought for CG as well as potential for later development.
I don’t believe rentals are too strong at the moment, however as Ingham grows I believe the market will pick up.
Hi CJ,
I don’t think its a great idea to invest in land unless it is in very high growth area. You are better of investing in a small residential property where a large portion of your outflow is covered by rent. And if you do it right, you may even have cash flow positive investment.
I am assuming you have a negative cashflow of approximately $7000 pa on your land investment. With that kind of negative cashflow, you can buy a relatively new $350-400k house/unit in a major city with prospects for good capital growth. For example, south east queensland is expected to grow over the next few years. You can invest your money there or similar high growth areas.
Hope this helps, Good LuckSanjiv
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