Marisa do you plan to sell your homes? I am getting terribly twisted up on the whole sell/hold decision. if i develop and sell i am up for 10% GST plus full tax of say 50%, leaving around 45% clear. If I hold then sell after a while the effective CGT tax rate is only 25%, leaving 75% clear, but the value will not be as much as a tenant has been there for a year or two depreciating the place – so it would work out about the same.
http://www.megainvestments.com.auJohn Carroll
John, good question. We were going to sell one and hold one. We have now decided to keep both.
The Singleton property will hurt though as rents are around $250 per week. I guess I am banking on continued growth for this area. I estimate a minimum of 10% pa.
I did not even consider GST in the equation.
Where are you developing at present?
Cheers, M[biggrin]
Hi MArisa, yes GST is a real kicker, the admin side of it alone is a real pain.
i have done a spec home in St James…. it has been dragging on so many years now it is almost funny. last week the kitchen cabinets went in, albeit all the wrong colour. turns out they belong to the house next door so they all need to come out again.
I am also doing a quad development in central mandurah. I will probably keep 1 of these. values down there have raced ahead so fast that I am very pleased with the result.
I have been flipping a block here and there around Baldivis and the anchorage whilst half considering building on them, but by the time you take the apprciation of the land out and weigh it up against building for 6 to 9 months (if you manage to pick the right builder) I just dont know if it is worth the headaches. It seems easier to be buying villas off the plan and watch someone else struggle to get them built and enjoy the resale rewards at the end. I have a few on the books like this and for what I paid for them I can’t see how they can construct them for that. I sold a house off the plan in Karratha and the delays on that are incredible… really eating into the profit margin (so I am on the other side of the fence on that one).
am also into a syndication developing in leederville – the project should be ok but the returns at the end of the day will be pitiful and is a big lesson in not handing control of my money to another so called expert.
I am a bit tired of all these loose ends so will spend the next 9 months wrappign them all up and tidying up the balance sheet. I guess I get concerned about trading all these properties when I read so much about the equity increases people are making… the likes of Kenneth and yourself for example, but Michael Yardney in particular who believes in keep everything. Ths contrasts greatly against this guy who makes an aweful lot of sense http://www.investinginland.com/land_myths.htm who basically says holding onto a depreciating asset like a building at a negative rate of return is a losers game. I think I will continue to develop and just accumulate ‘keepers’ ata rate of one in every 5 or so.
http://www.megainvestments.com.auJohn Carroll
we are in the process of building in bunbury with dale alcock and they are on time for nine mth finish.this will be our first cpp.
Hi All…
Another price rise for some of the builders this Thursday on 1 Sept 2005. Such as Celebration, Metrostyle and New Generation.
The price raise will be about $5000-$8000I just signed up with New Generation as some people said they can build within 6-12months. Hopefully they can do the same on my lot.
AUSPROP
Do you ever live in any of the houses that you build?
With the land estates around rocky and baldivis do you know how long it is taking to get titles at all?
I have just moved into one I built in Port Kennedy, now have all the fun of painting. Took 8 months from slab going down with WA housing centre. Have to decide next whether to build again or buy an IP to hold and reno. Still a bit of money to be made building again I feel just a matter of locate reasonably priced house and builder
hi natwayne – it took me about 3 years from woe to go to build the house I am in (and a serious amount of grief). I will look at it in a couple of years maybe but am happy to relax a bit. PPOR is a great tax relief when you are effectively developing for yourself so it is important to take advantage of it.
anchorage titles are about 3 or 4 months after release date, rivergums latest release will be titles around january but they are asking for huge deposits now (5%), baldivis central is quicker but nothing for sale there, meadow springs is about 3 or 4 months away. so generally 4 months which isnt bad.
http://www.megapropertygroup.comINVESTMENT SALES * RENTAL SOLUTIONS * STRATA MANAGEMENT
Hi Marisa
Sorry for the delay in posting. Im building in the Anchorage in Rockingham and plan to hold long term.
Regards
Regrow
You are a fool for 5 seconds if you ask a question, but a fool for life if you don’t.
I received a fax from Celebration Homes Sale rep today who has just started his own business where he is offering complete home finishing: ($20,000 incl GST)Carpets to all bedrooms, lounge.
Floor tiles, living areas, kitchen
Internal wall painting
Light fittings installed
vertical blinds to main windows
landscaping including retic, roll on lawns, plants mulch
Brickpaving including council crossover
2.5 hp split system reverse cycle air con
Cleaning of property after works are completed.Full written itemised quotes provided.
If you are overseas or interstate they will do final inspections and property handover on your behalf.
This is based on a 600 sqm block and 210 sqm home.
Any thoughts on this and price??
Thought I would bump this post.
In hindsight, this appears to be a serious bargain !Marisa are you on the air, and can you PM details of the rep to me pls ?
As well as a contact at Celebration for a house plan/price ?
I have bitten the bullet with Singleton and am ready to organise the building ….Thanks
kpGood to see this thread back in action. I’m sure I’m not the only one around these forums thinking of building in Perth, and it’s great to hear some information about builders/prices/delays etc.
Some more questions:
1)Has anyone got a two storey builder they would recommend? Any experience developing two storey housing, and is there anything in particular I should be aware of?
2)Does building a two storey for rental make sense? Has anyone done this,or is it more normal to be building a two storey as your PPOR?
3)Is land in Perth getting too expensive to make building a new home in an estate a worthwhile investment/development? Buying an older establshed dwelling actually looks like better value to me at the present time.
4)Does anyone have any favourite equations for working out land value vs house value when developing? I was told by a friend that the old rule of thumb in Perth used to be spend twice as much building the house as on the block, but that now he goes closer to 1:1.
Thanks!
Hi KP, check your messages.
Rob W,
Try APG for double storey homesCheers, M
Hi KP, can’t seem to PM you. If you send me a PM, I also have a guy at Celeb which I’m pretty bullish about too. I emailed the guy Marisa was talking about – hes still a bit off yet to start that business. I’ll be in the same position early next year so we could possibly get the same tradies…?
Rob W, Any luck with the double storeys? I was doing some research into that but the cost to build a double storey (not loft) is in the mid $2s finished. The rent return in simply not there – unless you do some serious depreciations. Give me a pm and let me know how you go. Am sticking with the single storey, commoditised 4×2 products….
Hi asdf,
Have sent you a PM.
Definitely interested in using common tradies if I don’t get the builder to do it turnkey…I need to go down there and have a look at the blocks first…haven’t been to Singleton in years.
Rob, I wrote a post in reply to your dbl storey query, but it didn’t take…
As asdf mentioned,the rent return does not justify the extra expense in going dbl storey, apart from the additional delay in construction with the floating slab, etc.The alternative is to construct the second storey with a timber floor on joists, and a hardiplank exterior, but from experience, they tend to be noisy ( creaks and groans ) and the upper floor gets very hot in summer, even with roof insulation.
I would think the only time you would go double storey is with a townhouse development to maximise living space where there is not a lot of land area.
kp
I try to avoid 2 storey… too expensive to build, too slow to build (an extra 2 progress stages), not appreciated by the market when finished. It’s ok when it is completely necessary, such as inner city lots or to capture a view, other than that I would leave it.
http://www.megapropertygroup.comINVESTMENT SALES * RENTAL SOLUTIONS * STRATA MANAGEMENT
HI John
so what would you build on a 395 sqm2 block if double storey not feasible?? I was looking at cheaper cottage blocks currently being sold at Madora Bay.Sales rep mentioned a standard 4×2 would be fine on this size block, hard to believe this one, even if possible – imagine it would effect resale?
Any thoughts?Cheers, Marisa
we just sold a few packages in Baldivis central that were really cool 3×2’s with a garage at rear (single storey) – I think the block was 408sqm. They are really popular and it is encouraging that the idealogy of the McMansion is slowly fading. There was the occasional opinion that ‘hey I can get that bigger house on that bigger block for the same price’… a lot of this is persoanl opinion and preference. I subscribe to the theories of “less is more” and “you can’t buy good taste”. Interestingly – I went to get some cottage lots at the last Rivergums release and the rep told me they had all gone and were the first to sell. Also need to bear in mind that a cottage home will probably cost very similar to an off the shelf large family home… it’s all to do with the mathematics of the perimiter of the building = square homes are cheap.
Also I wouldnt necessarily avoid 2 storey at all costs – just if there is a casual choice between the 2. My first lesson in that was when I did townhouses in Vic Park… it was an R60 site near to other R30 sites. The other R30 sites were cheaper and obviously cost less to build and were built much quicker. Muggins here brings the townhouses to market well after the competition and not only has to convince the buyers that stairs are a great lifestyle choice, but that they should pay $60k extra for it too.
http://www.megapropertygroup.comINVESTMENT SALES * RENTAL SOLUTIONS * STRATA MANAGEMENT
Hi fellow builders, I have just completed building with a project builder in the southwest. Even with a professional background in Interior Design/Architecture it was not without problems. I built with Country Builders (formerly JCorp), who were great right up until the finishing stages. The poor level of finishes required work to be re-done several times – so beware of this, and check as much as you can at each stage and thoroughly. Their faulty workmanship and overruns cost me 3 months potential rent! It is important to condider that it is not like building your own home where you can finish little things off at a later stage. If it is for rental or sale everything must be finished before occupancy. These final stages can add-up time wise. Dale Alcock is the parent company for Homebuyers centre and Celebration Homes – hence the good reputation.
12 months seems to be the norm over here as well. I cant for the life of me work out why they take so long??
Anyone know much more about Celebration Homes??
Ausprop?
Reason I ask is the new IP is a celebration home..
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