Am I going crazy or do kit homes seem like a really good investment vehicle.
I've been looking online over the last few days and I'm pretty comfortable that I would be able to get a 2×1 fully installed for less then $50k. It seems to me like a no brainer…buy a house, subdivide, put a kit home on it, sell the original house and keep the kit home. Then you've got a 2×1 earning quite likely positive cash flow owing $100k give or take.
Thoughts?
Have no idea but would love some insight myself
I saw a full 94sqm kit home on display at Bunnings for $46k + $5k installation. with a 10 year warranty!
http://www.bunnings.com.au/diy-advice/planners/modular-building-planner
Not sure what your resale would be, but definitely a good granny flat idea for some extra cash flow.
Jimmy86 | Future Assist SMSF Specialists - Bris | Melb | Syd
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10k for stump and bearers potentially.
Sewage and water cost – 3-5k if not connecting to oringial house but if making a seperate title you are looking at standard subdivision costs 20-30k
Planning approvals 3-5k
also would need the cost of a carport.
landscaping
fencing
Good price though. That the type of home i think would make a great beach shack in some nice country beaches
Did the 46k include the internal fit out
carpet
tiling
kitchen
painting
skirting and cornice
bath shower
taps
I think its only for the shell
I would think its closer to 80k fully installed and that is most likely doing a fair bit of the inside yourself
Most of them at that price don't include the fit out but I've come across a few that do.
I'm thinking it's a good way to start a portfolio. For example if I buy a place for $400k then renovate, pay the $100k to subdivide and put up the kit home, sell the original and keep the new place with $100-150k debt. I certainly wouldn't be able to keep a $400k IP presently and buy a ppor, however I could probably hold a $150k IP and still aford a ppor.
Food for thought anyway.
Really, Bunnings?
I think model of installing these 2 bedders that are transportable. Ie you can take them down again. Is that you could purchase a quality blue chip property on a bit of land put it in the backyard to make it now significantly positive cashflow so you can hold for the long term. This has been done in wa for years already. People install it on a quality home and when they sell the property as is or they either remove and transport it elsewhere.
The problem with kit homes is financing. And yes there might be kit home lenders that lend to them. But more often then not the actual finance outlay to build a new home on the rear of a subdivision would be less then the 60k-70k to buy outright a lot home and fit it out. Because the majority of the time this would be the situation you are in.
I've been looking at similar things with modular housing recently and the issues have been both finance and also council approval. Some councils just plain have issues with that type of housing, don't like it and don't want it in their area. Not amount of logic can convince them otherwise. As it's removable housing some loop it under the same sorts of conditions that really were meant to cover caravan park trailer style homes. I think it's a matter of finding councils that are OK with it. I've been having trouble with that, I was hoping building companies themselves would give us a tip but so far no luck. If anyone knows of any councils like this in NSW let us know…
Weirdly enough I heard conjecture of one council that would allow a container house but not a modular one!
I recommend contacting a kit home specialist and asking them what some of their existing clients have paid for with full installation and associated costs in your local area. I went through this process and that was the most accurate forecast on full costs that I received. Don’t settle for the advertised kit home prices. There are additional costs but someone in the business of selling kit homes has been exposed a lot to these projects. Good luck :)
I’ve never financed one myself, but if you get a licenced building to build it under a fixed price contract, and it is not removeable, then you should be able to get standard loans.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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