Hi all
I am preparing to buy my first property but its going to be a block of land in a different state to which I live. My plan is to get the land which will be in WA now to prevent price rises in the future, pay it off in 5 to 6 years and then move to WA and start building my first house on that land once its paid off in the first few years.
My question is since its my first time buying a property but seeing I am only buying a lock of land and will be living in a different state will it be viewed as my first property thus not having to pay stamp duty, transfer & registration fees or will it be viewed as an investment property thus having to pay all that?
Also if its viewed as an investment property, will the mortgage interest on the land be tax deductible but its not earning me any income as its a land not a house on a land that I am renting out?
If this is not a good investment choice what other strategy would you recommend? I guess what I am doing is planning for my future more so than investment at this point as I am planning to move over in a few years time and want to get into the market while I can financially afford to.
Ideally you should drive around see whats happening in the area you want to buy look for land that is for sale that could be turned in to a subdivision. If this is not possible you will have to look on the net, look in pappers. Talk to agents ,developers, builders and council look on councils website and find out about there future plans for parks ,roads shops industry etc . Find out who is buying what where , when and why, everthing you can. You have to be one step ahead of the crowd. The crowd arrives a day late. You can do this as you have years to observe. Just keep an eye on things when some land sells to a developer find out who, he may be keen to get some sales under his belt just to show the bank , and to save on marketing and agents fees, the less blocks he has the tighter the supply and the more he can ask for his other blocks.that is what you have to figure out, you may be better waiting, but I doubt it because inevetibily there will be cost blow outs and delays over stupid things so latter the developer will find he has to ask for more. You buy the land on conditions that settlement is when you get a building permit. You set a date it may be 1,2, or more years, to have the buildng permit or you can opt out. Now you only pay a 10% deposite into a trust account. The good part is if you borrow say 10,000dollars for the deposite for 18 months the land will have only cost you about 1300 dollars interest and 700dollars for a solicitor to draw up a simple contract. I would expect in that time the land would have gone up at least 15 times that. You could buy as many blocks as you want/afford It is good you have a bit of foresight, In my limited experience it is hard to sell when you dont have a building permit because most people arent too savy, and when they decide to build they want to start as soon they can, and pay big money for a crappy location. and overlook that bargain gem. I expect to get a building permit myself in aboutt 2 weeks for a block I bought 14 months ago with interest for the deposite and legal fees cost about $1500 it is now worth $50,000 more than I paid. I like to buy property before it is marketed by real estate agents. Some people dont like to use agents to sell and dont see the potential in there property and will underprice it.
firsttime one thing I forgot to mention when you place your deposite you wil need a letter from the bank guarrantying you are good for the finance at settlement. You may want get some valuations done by a vauler before purchase.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
