We have a 65 acre rural property valued at approx $280,000 with a loc of $182,000. There is plenty or room to build another house on the property.
What we are considering is to build another house and rent the existing house (our PPR) out.
I see this as being a way of ensuring the property earns us an income that we simply don’t get out of the cattle that are presently on it!!!
Any bright ideas or suggestions welcome and encouraged.[
][]I see a few people have read this…but could someone please give me some advice. Is this a good idea or not.[?][?][?][?][?][?][?][?][?]
Sounds like a good idea, and one that I have toyed with. Would love to hear Westans or Steves view.[
][]Sparkle.
Hi,
In fairness to all, I think that a lot more information is required. My first concern is that if the property is rural with cattle on it, are you able to build another dwelling? This would need to consultation with the local council. The next would be, is there a rental market for the property if you were to build a second home.
How much would a second home cost and would you have to borrow funds to do this? If so, what return would you get on your “investment” or would it be better to invest your money in property elsewhere?
Not a real simple one to answer off the cuff.
Hi Kelly,
I notice from your profile that you’re in Maleny. That’s quite a popular tourist destination, was there myself with my wife last year and loved it. Have you thought about building a couple of self contained cottages and renting them out to tourists?
Just an idea.
Cheers
Chris
Thanks for the input. Yes we can build another dwelling on the property. When I say “Cattle” it’s a bit of a joke really, 65 acres can feed about 11 head – but like most of Aust, no rain no feed. The cattle are more like glorified lawn mowers with a twice a year kill for the freezer.
There is an acute shortage of rental properties in my area. We are 12km out of a major tourist town on the Sunshine Coast hinterland.
I’d expect to be looking at in the vicinity of $60,000 to $100,000 (being extravagant) to build and yes we will have to pull money from somewhere.
The line of credit we presently have was negotiated in February 2003 just before our area went nuts. Nothing lasts up here longer than a week….as in vendor puts property on the market and within 7 days it’s under contract.
So if we borrow another say max $100,000 that takes total debt on property up to $282,000 and we rent the existing house for $350 per week.
I see this “11 second rule” being spoken of but I don’t know what it is. Am waiting with baited breath for Steve’s book to come out to me.
I think its a great idea, personally i’d be building as many as possible, subject to council approval, it should be easy to have them positvely geared and means you can keep a close eye on your investments, also as simple repairs become needed or one needs to be painted you’ll be right there, why pay for more land if you dont have to, very simple houses are not expensive
Thanks for the suggestions. Chris Maleny is lovely but way too many tourists for the locals (that’s me I guess). We thought about putting cabins in for the tourists but access to the back of our property is a bit tricky…unless the tourist feels like hiking it and having no power when they get there.
We (I) figures that putting at least one other house on the property allows us to stay where we love it…..only three houses on our dead end street….and both keep an eye on the rental and be available for maintenance etc…not to mention doing a roaring trade in firewood in our cold winters.
I also thought that it was better to develop what we have now with a view to getting some additional income going before taking a quantum leap into anything else.
65 acres = 263,045.7 square metres
That’s a lot of land to build a lot of houses.
wow.
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