Yes I know it is from a song. I'm new to this web site, and am finding much info I need.
However? I am looking for an oppinion or 2.My situation is simply this…
We have 5000 m block, bush setting with coastal and valley views, sunrise and sunsets are great.
It is a street with a mix of million $ plus homes, some are very grand, then there are a few like mine, 2 bedroom timber cottage. The street is a dead end.
Mine has a bit of wear and tear, but has the great views, not all have this, certainly the million $ ones don't.
I have a shed bigger then the house, plus another shed. These are seperated from the house via seperate driveway.
The block is 1/2 native bush, with resident wallabies, many birds etc, no rear neighbour but crown land.
We paid 180,000 for this several years ago. Done many improvements, mainly the sheds etc.So, do I knock this over and build the 5 bedrrom place with the trimmings using ecofriendly products etc, turning it into the expected 1,200,000 property we have been reliably told. Or sell up as is where is for the expected 480,000 and nick off chasing our dream we have for another part of the country.
I should point out, I am handy with a set of tools, hense the shed, so it is estimated that I can save 150,000 on building our new house with me getting involved working with a builder. I have an OS job which sees me home for long periods to allow this.
The new home design we have in mind will also allow us to move in long before 100% completion, meaning one levels interior need not be completed other then structural components.
The new home will be architect designed and quite unique by nature due to shape of the land. This will be a selling point I am told also.
I am hesitant here as I am nervous about the large mortage I'm about to ask a bank for, thinking of interest rates here.
Also, I have 2 invesment properties, one has gained 250% value since I got it 12 years ago, another 100% gain, rent return has grown the same, and occupancy for both have been near %100. So equity is of no trouble for me.
Perhaps I am rambeling on here for no need. Just looking for a thought or 2 before commiting.Thaks in advance, and also, thanks for this web site.
PS.
My name is something i look forward to saying one day, "It is all mine!"Hi Allmine
Ok so from what you ahve said you could be sitting on a nice pice of land in a nice area but that is presently underdeveloped given the rest of the area.
Firstly have you clearly defined your goals? In terms of money you need to achieve them etc and the timeframes in which you want to see them happen?
Are you looking for growth or income from your properties. This will help uncover the appropriate strategies you can use – refer to Steve's third book and The property Wheel etc.
Do all your other properties currently meet your goals?
If the answer is yes AND you have done your due diligence on the build costs and likely sale prices ( don't just take one agent's view of the world) for developing this piece of land then go ahead develop it. Would this be a PPOR for you, you mentioned something about moving into it? Why not just develop it an sell it – if there is enough profit in it for you.
Sounds to me like you are in a catch 22 position with emotions running all over the place . Yes it might be nice to live in once complete and have those amazing views but how long are you going to be satisfied with that if your heart really lies somewhere else.
remeber that whilst properties may have achieved rapid growth this may not continue depending on where your areas are in terms of the growth cycle. Also Equity in areas that are slowing or potentially falling ie like some parts of WA is actually UNREALISED PROFIT. That is you do not have the cash in the bank so therefore the equity is still at the mercy of the market.
Jumping into debt in some areas is also not wise, given the current climate. Although having said that High end properties are generally less likely to fluctuate as much as people owning them tend to be more flush with cash and therefore less likely to be concerned with interest rate rises etc. Be aware that if the market tunrs against you then the more debt you have the more likely you are at the market mercy if your income fails o keep pace with the changes.
Think clearly about what it is you are trying to achieve and then the strategies that you need to employ to reach that.
Warm Regards
SueMIT | Owen Real Estate
Email MeThanks for that sue.
It makes a lot of sense what your saying.
I have made my price judgements using market trends of what the bigger homes in the area have been sold for, not just the local agents and what they say.
The new house, we'll live in it ASAP to save on rent else where whilst finishing the building off, can't live in one of the investments as they are 2,000 k's away.
When completed, we'll sell it. Also I want to cover the 12 months living thing in case I am liable to capital gains tax on it.
As for my other properties meeting the goal, I'd be a mug to complain, for sure. They are meeting growth and income expectations, even before this rental shortage, there were a small cue of people wanting to live in them.
I may not know much of realestate, but I know location is something.
The info I am not sure on is something you mentioned, this business of the high end homes not being something effected to much by interest rates, I did read it once also. I can see your point, and it is that market we'd be targeting with this house as a block of land in this location with these views warrents a home of certain size now days.
SO i gues it is fairly obvious that developing is the go, just nervous about trippling a mortage I suppose.
My question now could be how true it is about the high end homes, as I have also seen some take a very long time to sell, but admittedly, I have doubts on how these were advertised.
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