I was wondering am I better off buy a investment property or buying land and build a house and sell it for profit? Thanks, Jason.
These are at two totally different ends of the spectrum Jason.
The first option – buy a developed investment (house/unit) and have the benefits of rent, neg gearing losses etc & payment of outgoings, interest & the like. It is easy to get into this market, returns are reasonably secure (ie you can reqsonably accurately quantify your yield, expenses, depreciation, etc).
The second option – exposes you to development risk. Risk includes long approval times with council – higher interest repayments, construction cost & timeframe, sales period. Your greatest risk is buying at the right price however much of the good work can be undone by a restrictive or slow council adding to your holding costs. You must fully understand how long it will take from purchase to settlement of your sale (post development) and how time will affect your profits.
megsaletta wrote:I was wondering am I better off buy a investment property or buying land and build a house and sell it for profit? Thanks, Jason.Jason,
Hope all is well. It all depends on you and what you want out of it. Purchasing an IP is good if you are too busy to find the right property at the right price, and do your studies on it in order to develop it. With developing there is sometimes a bit of a wait depending on how many developments you are looking to do (ie townhouses/units/splitter blocks/etc) and also, organising townplanners, architects, etc etc etc.
I don't know much about any other states, but Queensland (Brisbane area), I know that DA approvals can take a while, but if you are looking to do under a certain amount (such as 4 townhouses/units) it is possible to fast track it. Obviously, if you are just looking to purchase a block of land and throw a house on it, then DA's will not take to long, as long as it is in the right zoning etc. If you are looking to do that, I recommend you organize a long settlement (difficult to find – but, by all means not impossible), and by doing this, you offset interest rates, DA's, etc.
It is more than just getting a block, throwing a house and 'capow,' profit… but, it can definitely be rewarding, just as it can be risky.
If you are based in Queensland, please do not hesitate to contact me via email, and I would love to help you in your new endeavour.
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