All Topics / Value Adding / What’s the deal with kit homes

Viewing 11 posts - 1 through 11 (of 11 total)
  • Profile photo of tommytuckertommytucker
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    @tommytucker
    Join Date: 2010
    Post Count: 82

    Am I going crazy or do kit homes seem like a really good investment vehicle.

    I've been looking online over the last few days and I'm pretty comfortable that I would be able to get a 2×1 fully installed for less then $50k. It seems to me like a no brainer…buy a house, subdivide, put a kit home on it, sell the original house and keep the kit home. Then you've got a 2×1 earning quite likely positive cash flow owing $100k give or take.

    Thoughts?

    Profile photo of Katri84Katri84
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    @katri84
    Join Date: 2013
    Post Count: 3

    Have no idea but would love some insight myself

    Profile photo of Jimmy86Jimmy86
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    @jimmy86
    Join Date: 2013
    Post Count: 46

    I saw a full 94sqm kit home on display at Bunnings for $46k + $5k installation. with a 10 year warranty! 

    http://www.bunnings.com.au/diy-advice/planners/modular-building-planner 

    Not sure what your resale would be, but definitely a good granny flat idea for some extra cash flow.

    Jimmy86 | Future Assist SMSF Specialists - Bris | Melb | Syd
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    Profile photo of wilko1wilko1
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    @wilko1
    Join Date: 2010
    Post Count: 510

    10k for stump and bearers potentially.

    Sewage and water cost – 3-5k if not connecting to oringial house but if making a seperate title you are looking at standard subdivision costs 20-30k 

    Planning approvals 3-5k

    also would need the cost of a carport.

    landscaping

    fencing

    Profile photo of wilko1wilko1
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    @wilko1
    Join Date: 2010
    Post Count: 510

    Good price though. That the type of home i think would make a great beach shack in some nice country beaches 

    Profile photo of wilko1wilko1
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    @wilko1
    Join Date: 2010
    Post Count: 510

    Did the 46k include the internal fit out

    carpet

    tiling

    kitchen

    painting

    skirting and cornice

    bath shower

    taps

    I think its only for the shell

    I would think its closer to 80k fully installed and that is most likely doing a fair bit of the inside yourself

    Profile photo of tommytuckertommytucker
    Participant
    @tommytucker
    Join Date: 2010
    Post Count: 82

    Most of them at that price don't include the fit out but I've come across a few that do.

    I'm thinking it's a good way to start a portfolio. For example if I buy a place for $400k then renovate, pay the $100k to subdivide and put up the kit home, sell the original and keep the new place with $100-150k debt. I certainly wouldn't be able to keep a $400k IP presently and buy a ppor, however I could probably hold a $150k IP and still aford a ppor.

    Food for thought anyway.

    Really, Bunnings?

    Profile photo of wilko1wilko1
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    @wilko1
    Join Date: 2010
    Post Count: 510

    I think model of installing these 2 bedders that are transportable. Ie you can take them down again. Is that you could purchase a quality blue chip property on a bit of land put it in the backyard to make it now significantly positive cashflow so you can hold for the long term. This has been done in wa for years already. People install it on a quality home and when they sell the property as is or they either remove and transport it elsewhere. 

    The problem with kit homes is financing. And yes there might be kit home lenders that lend to them. But more often then not the actual finance outlay to build a new home on the rear of a subdivision would be less then the 60k-70k to buy outright a lot home and fit it out. Because the majority of the time this would be the situation you are in. 

    Profile photo of lukstarlukstar
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    @lukstar
    Join Date: 2014
    Post Count: 2

    I've been looking at similar things with modular housing recently and the issues have been both finance and also council approval.  Some councils just plain have issues with that type of housing, don't like it and don't want it in their area.  Not amount of logic can convince them otherwise.  As it's removable housing some loop it under the same sorts of conditions that really were meant to cover caravan park trailer style homes.   I think it's a matter of finding councils that are OK with it.  I've been having trouble with that, I was hoping building companies themselves would give us a tip but so far no luck.  If anyone knows of any councils like this in NSW let us know…

    Weirdly enough I heard conjecture of one council that would allow a container house but not a modular one!

    Profile photo of ClintClint
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    @clinth
    Join Date: 2014
    Post Count: 6

    I recommend contacting a kit home specialist and asking them what some of their existing clients have paid for with full installation and associated costs in your local area. I went through this process and that was the most accurate forecast on full costs that I received. Don’t settle for the advertised kit home prices. There are additional costs but someone in the business of selling kit homes has been exposed a lot to these projects. Good luck :)

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    I’ve never financed one myself, but if you get a licenced building to build it under a fixed price contract, and it is not removeable, then you should be able to get standard loans.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

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