I recently read in one of the current Property Investing magazines of a strategy to buy in one of Australia's best growth corridors – City of Wyndham (including suburbs like Tarneit, Wyndham Vale, West Werribee, Truganina) and so on where they have a lot of new housing estates and are resource intensive areas (new infrastructure etc).
The article then went on to talk about a Pick & Flick Strategy where you could sell after owning the property for 2-3 yrs and make reasonable equity/profit.Has anyone out there had experience investing in these new kind of estates where it's not overly expensive to build a new home with good depreciation benefits, minimal stamp duty etc…… but what about the rental market!! I would hate to invest then find I am unable to locate a tenant for some time.
Any thoughts would be appreciated.
Bob
Striker
Email MeHi. My PPOR was a house and land package in Hoppers Crossing. I wasn't into investing as such back then, so didn't bother to check what the place was worth after only 2-3 years. I will say, however, that in 10 years it nearly tripled in value.
Things to consider are:
You will have to pay interest all by yourself while it is being built.
I'm uncertain where you will stand on the matter of claiming expenses (eg interest) if the property is built in a particular financial year, but it receives no rent in that financial year. If it is the case that you can't claim expenses if your property earns no income in the financial year in question, then you'd want to be very careful about the timing of such a project. Perhaps someone else can comment on this point.
Your house and land package may not include landscaping.
Do your homework on vacancy rates – they are quite high in the Hoppers Crossing/Tarneit area at the moment.
Like for any investment property, you'd want to ask yourself the question of how long you could afford to hold the asset if you had trouble getting a tenant.
Remember that you get a capital gains tax discount (50%) if you hold the asset for more than 12 months. Do your homework on when the 12 months commences (eg at signing of contract? or upon completion of the build?)
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Prices have just skyrocketed on land in these estates in the past year. I purchased 540 sqm and will have my house completed this month.
I paid $140k for the land and it would now cost $200k, if you could get hold of it.
If you look at the difference in cost between the purchase price from a builder for a complete house package and the cost to buy land in an estate then build, it appears to be about a $40k differential at the moment. (i.e. builder must have secured land at $160k that would now sell for $200k).
I think that on this basis that there could be some money in purchasing a house and land package, then onselling to someone else prior to completion. During the next few months, all the stock secured at a lower price from builders will quickly gain $40k in value.
looking at buying in doreen area myself…prices just keep going up up up….
i stumbled across this which may help others
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