Hey all,
I am subdividing a property I have and selling off the rear 400sq. It is a corner block so has it’s own street frontage. My question is.. Would you just sell the vacant block, which is probably less risk.. Or build a house on it for the sole purpose of selling?
Do you believe the extra risk of paying to build a house would reap the benefits in the sale price?
The property is in the eastern suburbs of Brisbane.
Thanks heaps.
The first question you have to ask is not whether or not you should build a house on it, the question is whether or not you can afford to do so. Houses can take a long time to build and you have to take the interest repayments into account. Can you afford them each month and can will the bank lend you the money to do so?
Then look at your block, if it has a big slope or is unusual in any way then you may not be able to use one of the standard houses like the ones they sell at Wisdom Homes or that sort of stock standard home.
Then you have to look at your area and whether it needs more homes, is there a demand for it and what kind of home is in the greatest demand?
There is no doubt that building a house and then selling it CAN make you more money than just selling a vacant block. But do you want to go through all that hassle? If you do then great!!! Otherwise maybe you should think about just selling the block and pocketing your profits.
Ryan McLean | On Property
http://onproperty.com.au
Email MeThanks for the reply Ryan,
The block is basically flat, so should be reasonably easy to build on. I definately can afford to build the place, it’s just more of a matter of whether it would be financially beneficial to do so.
The block itself is probably valued around $400k based on recent sales. New houses in the street sell for between $800k and $900k. So the tricky question is knowing whether I could build a house that fits the area cheap enough to make it worth while.
Am starting to lean towards the easy option of just selling the block.
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