Hi everyone, long-time reader first time poster…
As the topic suggests, my wife and I are looking to buy our first property. We have been looking for months and are struggling with the two seemingly opposing paths:
1. big block of land with a run down house with the possibility of subdivision later on
2. a 2-3 bedroom unit less than 5 years old in a good location near transport and shops/schools etcWe can borrow up to $350k, and I was hoping to get some opinions of the ‘better option’ from the above choices. My gut feeling in to go with the additional land, however the benefit of a higher, continuous rental stream is also appealing.
Additional info:
-We re looking in Wantirna/Scoresby/Boronia/Ferntree Gully areas
-Looking to live in the property for 3-4 years then rent/sell/subdivide/build after thatAlso some advice as to Private sale or auction giving better deals within the next month or so would be most appreciated.
Cheers,
.
mate,
go for the big block with chance of a subdiv later….find out everything you can first, ie if you actually can subdiv it or not…if you can go for it!
build 3 or 4, sell enough to cover most of (or all) of your costs, keep the rest and enjoy the + cash flow, you could work less and go fishing or play golf or whatever you wanna do…….
i haven't done it but plenty of others have and they're the types the rest of us suckers who work 40-60 hours a week wanna be like…..
if you can make it work, go for it mate
Grant N
Horses for courses, aaabbbccc. Depends upon what you want to achieve. If you're planning on living in the property for a few years, I'd proabably go for the big block, so long as it is in a position to have good capital growth. Why? because as your PPOR, there are exemptions from capital gains tax which will apply to your big block. Not sure how this goes when you actually develop it and rent it out, if you do. There must be a line there, but I'm sure you'd at least get your occupancy period cap gains free. Have it valued before you rent it out. Why else? Because I like freehold. I just have soft spot for actually owning the land. It just makes more sense to me, though this is an ongoing argument between various parties who have different points of view. I like land. To me, the unit thing might make a good investment because of the higher cash flow, but as an owner occupier, there aint gonna be no cash flow for a few years by the sound of it. The best period of depreciation on your unit will be wasted as your PPOR. Bang go your best tax deductions, as you pay off the toughest part of the loan and live in the property. At least with the block, there is still good tax lurks, and a great opportunity to add value tax free while you live there. Not much value to be added to a new unit.
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