hi,
what do investors consider about land and package deals with very low deposit. liek what allam homes does.
one of my friend bought the package in acacia gardens and the package was to be ready within a year and by the end of a year he made a good profit and sold the house for better value.
he just put an 1000 deposit.
are there any traps ?
please advice.
How do you know, that current cap gains will continue, since that is what you are relying on to make your pprofit.
I have done this before and came out even or minimal profit(it was not deliberate, it was meant to be our new home, but changed oour minds).
Do your sums, add stamp duty, r/e agent fees and guess waht the cap gain might be.
The biggest unknown is, if the present property boom will continueHi,
How does anyone know that the boom will continue? All you can do is look at the current economic climate, which is still looking very positive, look at the growth trend in the area and take each deal on its own merits.
My personal strategy is based on buying smart and reselling for a profit. That could mean buying on a long settlement, doing some renovations or simply getting the right property at the right time.
In regards to your question new investor, if I was going to look at the strategy that you mention, I would make sure I had finance in place in case I could not re-sell before settlement. I would also look at the area’s growth for the past 12 months, look at the cost of the property to build and then forward plan to the potential gain on completion.
If you know the area and do your sums well, you should be able to plan within a small margin what your profit should be. Don’t just jump in though, do your research.
Cheers,
Mathew.
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