Hi all,
My parents have a property in Bentleigh (probably worth around $550k+). They owe $100k. My husband and I are house hunting but at the same time want to take the opportunity of the lower prices and buy something to make money off too. My friend is pushing for the idea of us buying a house on a large block, then subdividing and either selling the empty block with plans or building and selling the unit. We then either lease the house or sell and find something else to subdivide, etc…
There are a few things we could do but I just need someone to bounce some ideas with me.
1. we buy a 2bd unit for my parents and rent it out to them (they are all for the idea) and we move into their 3bd unit in bentleigh.
2. we buy a house with a large block and empty the land/build and sell the block (this is obviously a good idea but the problem here is that I don't want to live in a house with a tiny backyard as we have 2 little kids and I want them to have lots of space to play in). Also I don't like the idea of moving from house to house as I want stability for my kids/family.
3. we buy a house for ourselves to live in (not necessarily with a large block at the back)… but one that we like and will set up as our family home… and at the same time we buy another place that we can rent and possibly subdivide and sell in the end to make a profit.
Can you tell I am confused, lol?
TIA
Hi,
Thanks for your post and welcome to the community.
To answer your questions:
Option One
1. we buy a 2bd unit for my parents and rent it out to them (they are all for the idea) and we move into their 3bd unit in bentleigh.
This assumes that your parents will go for this and either gift you or lend you their equity. Is this a realistic financial situation? That is, do you rent their unit and they rent yours? I'd like to see the numbers fleshed out or more clarification on the terms.
Option Two
2. we buy a house with a large block and empty the land/build and sell the block (this is obviously a good idea but the problem here is that I don't want to live in a house with a tiny backyard as we have 2 little kids and I want them to have lots of space to play in). Also I don't like the idea of moving from house to house as I want stability for my kids/family.
It's good that you are clear on what you want. Are you able to achieve the space / yard with option 1 in your parents 3Br unit? Also, do you have the financial capacity to buy and fund this option? I think this option will take better shape when you have a potential deal to work through – both land size, potential dwellings and also money,I would encourage you to also look at a 5 year plan, so that you do the deal and live in the property for five years and then trade up. It is unusual for people to live in the one property for life thesedays.
Option Three
3. we buy a house for ourselves to live in (not necessarily with a large block at the back)… but one that we like and will set up as our family home… and at the same time we buy another place that we can rent and possibly subdivide and sell in the end to make a profit.
This is a possibility, although it will be cash and debt intensive. Only you know what you can afford.Overall, I like the idea of being proactive of investing, but at the same time it seems like a family home is a large priority. I suggest you work out which one you want more – a home or investment property – and then build a strategy around that.
Be careful trying to turn a home into an investment property as there is a lot of emotion in homes, whereas investment properties should be simply a matter of:
a. how much down
b. how much back
c. how much time
d. how much riskMerry Christmas.
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
You must be logged in to reply to this topic. If you don't have an account, you can register here.
