Hi Guys,
Long time lurker around these waters and have gained some great knowledge from you all over the years, I am hoping a few few of you old hands may be able to offer me some advice or suggestions on my current predicament.
We have a 2000m2 block of land in Longwarry, VIC that was our first purchase coming on 3 years ago for 75k, our plan initially was to build our PPOR on the block but circumstances changed and we ended up buying closer to cbd as we live and work there, as such the block became an investment and current valuation sits at approximate 115k however it is hard to determine as there are very few blocks of this size in the area so its tough to get a gauge as there have been no recent sales, the dilemma is.. given the market is reasonably flat at present.. sell and come out about even or marginally up (given interest paid over the 3 years) or build a spec home over next 3 – 4 months, move in for a period of time and (ease out current flat) and then sell? the rationale here being that hopefully the block is worth more with a house on it plus avoiding CGT as it would become PPOR, the problem being ovet the past few years is that we are getting no return on our investment and vacant land is not tax effective in terms on claiming deductions.
The block is within close proximity or town centre and the town appears to be moving forward with new estates being built, however the town has always been the ugly sister of the surrounding towns, on the plus side its just over an hour from CBD and is well serviced by rail. I can see progress in future but how far into the future is the big question.
Your thoughts would be appreciated.
Hi, what's the end value after building?
Cost of land = $75000 +
Building = $160000
Total cost = $235000Can you sell for $430000? or more? Any less means it's silly to build.
The other more interesting/exciting idea is to build two. Does your zoning allow 1000m2 blocks?
Then you have:
Cost of land = $75000
Cost of construction = $380000 [$20K more for holdingcosts & contingencies. You can increase this number for safety]
Total cost = $445-450000Each house sells for $350000 = $200+K profit.
Don't forget GST & tax.
Good luck,
KYkum yin lau wrote:Hi, what's the end value after building?Cost of land = $75000 +
Building = $160000
Total cost = $235000Can you sell for $430000? or more? Any less means it's silly to build.
The other more interesting/exciting idea is to build two. Does your zoning allow 1000m2 blocks?
Then you have:
Cost of land = $75000
Cost of construction = $380000 [$20K more for holdingcosts & contingencies. You can increase this number for safety]
Total cost = $445-450000Each house sells for $350000 = $200+K profit.
Don't forget GST & tax.
Good luck,
KYThanks for your response KY
Really appreciate your feedback, Your first suggestion is the very idea that I have been fumbling around with in my head for 6 months or so now, I am thinking the experience I would gain from such a project would be invaluable too.
Your figures unfortunately do sound a little "pie in the sky" in terms of whats realistically achievable, there is an average house on the same st on 4000m2 with a barn advertised at $380k.
My Math would be as follows:
$90k Block owes me (inc interet paid to date)
$180k 25sq approx spec home inc fences and landscaping.
$10k Interest and incidentals.Your second suggestion re:sub divide into 2 block is also a thought I have wrestled with and hav emade some enquiries, it is close to the township and that could certainly be an option, however it would need to be a battleaxe style setup and with only 22m frontage i'm not sure how much that may devalue the blocks, and whilst we are entering such a period of uncertainty with respect to the housing market maybe I see this as too higher risk? i dunno… maybe I should just hang them out there and have a go.
thanks for your thoughts anyway.
We paid $113,500 for our 1 acre block and built a 4br + study home, we have also put up a large tradeys shed and a large undercover entertaining area. Total cost to do all this $216,500 – so $330,000 in total. It is now on the market for $460,000. With the market being a but up and down at the moment due to interest rates it may take a little longer to sell, but in answer to your question it can be done
We also put a lot of thought into the house itself and saved money by using a very basic floor plan from a cheaper design but then created out own facade so that it didnt look cheap and nasty.
Be patient to, we have had our land for a few years now, but the current price for the same size block is $150,000, and we have built our house 18 months ago, so it all takes time.
Your venture sounds exicting! Good luck with it allRichLee wrote:We paid $113,500 for our 1 acre block and built a 4br + study home, we have also put up a large tradeys shed and a large undercover entertaining area. Total cost to do all this $216,500 – so $330,000 in total. It is now on the market for $460,000. With the market being a but up and down at the moment due to interest rates it may take a little longer to sell, but in answer to your question it can be done
We also put a lot of thought into the house itself and saved money by using a very basic floor plan from a cheaper design but then created out own facade so that it didnt look cheap and nasty.
Be patient to, we have had our land for a few years now, but the current price for the same size block is $150,000, and we have built our house 18 months ago, so it all takes time.
Your venture sounds exicting! Good luck with it allThanks for your response Richlee,
Mind if I ask where you are located and the which company built your home? any advice on spec builders would be appreciated.
Cheers
Oh gosh I have not logged on to the forum in a long time! My sincere apologies for not responding to your question.
That particular property was in Regional Northern Victoria and was built by Dennis Family Homes
It sold in Sept 2008 for $465,000.We have almost completed building another home in the same location which we will rent out because we have since relocated.
It sold in Sept 2008 for $465,000.You must be logged in to reply to this topic. If you don't have an account, you can register here.
