Hi all.
I bought an investment property on a corner block some time ago.
Whilst scanning through the real estate guides, it turns out that the house next door is now for sale.
My questions:
a) Is it generally a good idea to buy an adjacent property and if so, why? E.g. Development opportunities etc. Would the potential upsides justify paying a premium for the house next door?
b) What are the downsides to buying the adjacent property? E.g. Without council approval, you'll just end up with 2 houses next door to each other.
c) Is there anything else I should consider in deciding whether to buy the house next door?
Many thanks in advance.
Owning 2 adjoining houses means you can choose some of your neighbours (if you live in one). Yes, it can make sense to pay a premium for the second block if it gives rise to additional development potential eg a single block will allow 2 dwellings however 2 blocks will allow 5 dwellings (or better still an increase of 30%+ on 2 single lots).
Have a look at the LEP to confirm if there is any development/subdivision potential to be gained from having 2 adjoining lots.
It is also possible that if there is a minimum block size after subdivision, buying the second block could assist with this.
For example you have a 1000 sqm block and council regulations state that the minimum block size is 600 sqm. Buy the 1000 sqm block next door and create 3 blocks which are all at least 600 sqm.
If you are going to live in one and rent the other for a while, keep in mind you might find it painful observing your tenants each day. They might not treat the property as you would like, and you'll have to see it happening each day
Just get in the right mindset in advance if following this path.Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Just to clarify.
There's no intention to live in any of the 2 properties.
They are both for investment purposes.
FYI. The second property next door has a frontage on the adjoining street and the properties are located in Wollongong, NSW.
Sound like you might need a 3rd block as well.
Just get in the right mindset in advance if following this path.You must be logged in to reply to this topic. If you don't have an account, you can register here.
