Had some contact with a company selling house and land packages for investment purposes…They say they only build them in high growth areas …in Queensland/NSW mainly…Whats your thoughts on investing in new property? cheers
House and land packages being sold to investors are generally located in suburbs located some distance from facilities and in suburbs with a domination of first home owners.
If your suburb is largely made up of first home owners you'll be exposed to their financial situation. Bearing in mind FHB tend to be highly leveraged and over capitalised and are exposed to interest rate movements.
The other strategy marketign companies often use is 'you'll save' stamp duty because stamp duty is only levied on the land value and not the finished product.
You'll also need to investigate the backgroun of the building company. On time – on budget is essential as you'll have interest to pay on your block loan and also on your draw down payments. How ill you feel seeing all of the money going out the door without any income coming in during construction?
If this is your first property – make sure you are mentally prepared for delays, no income etc before you enter the contract.
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