Hi All
I have been thinking about this strategy and wanted to get some advise.
I currently rent my PPOR, I owe 242k, it should fetch in the region of 305-320k.
Savings are minimal. personal debt minimal. income 80K PA.
I was planning to release some equity to purchase property no 2.
The idea was to purchase a large block in western suburbs (braybrook, sunshine, sunshine west) 400 – 425k. I wanted to find a property that I could do both or one of the following things;
-Make cosmetic renovations to increase value then rent
-subdivide land and sell, using that money to pay down the debt.
Does anyone have any ideas or experience doing this.
What am I trying to achieve? Experience, increase my ability to find a good deal, accelerate my path to owning 10 proprieties.
Feedback welcome!!
Subdivide to sell the existing house. Whilst building on the subdivided land. New home will build in more profit then selling vacant land and also if kept for rental you have great depreciation for first couple years.
Things to research and or will help you
– land division costs (surveyor) differences between Torrens and community pricing
– hire a planning consultant if this is your first time cost 1-2k get them to show you have to read council development plans
– understanding the development polices is crucial, without it you cannot set your searches to find what actually are the profitable deals , because you don’t actually no the minimum requirements that are required. And also don’t know the fine detail that can put you above everyone else at auction day. If you know you can subdivide a property once twice 3 times, 40 times over someone else you have the advantage.I would say that if you don’t know how to read the development plan don’t even bother looking at properties.
Because the properties that agents Advertise as subdividable are the ones that are not profitable as they load the land price into the house for sale price.Selling PPOR for a deposit on a subdividable investment property would be my advice as well , would get you Another 60-75k based on your sums
personal loan from bank, family or friends, to cover hard costs of (assume 30-40k for everything) it would be variable due to property and number of subdivisions.but for single that would be a good amount with contigencys
80k income would cover a Personal loan and a investment loan and a construction loan as well .
Polk around here (Brisbane but …):
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