Advice Required - First time buyer

Hi all,
I am new on here so not sure if I am posting in the right forum..

I am currently earing $90k before tax and I am living at home. For investment, I am looking at purchasing a big block around 500spm and sub diving the block and selling half of it.

Do you think this is a smart move for a first time buyer?

Please feel free to shoot any other ideas.

Thank you!

 

Are you sure you can subdivide a 500 sqm block? 250 sqm is tiny.
Where did this idea come from?

 

As a property novice, do you really want a development to be your first foray into all of this?

If you're confident then ignore my advice - I admire ambition.

But if you're not then be careful.

 

I agree. Start with something income producing, and you can transition into something more complicated later on. Unless you have people around who can help you do the subdivision and have experience, I would start with something a bit more conventional. Have to keep your bank happy too - boring is beautiful.

 

No.

Overall risks are too high for a newbie for many reasons.

Most people tend to focus only on the upside but imo you need to focus on the downside risks. For a newbie just starting out, you need to have the best possible start with a reasonable amount of risk.

Buying land to subdivide as a first project, on the balance of probabilities, won't be a smart move for you.

 

Depends. What profit do you project after tax and GST ? If you cant calculate that then yes you lack experience. Lenders wont normally lend for the land in such cases. The costs to subdivide can be significabt incl application fees, approvals, site costs, civils, council levies, fees, permits, contractors and more. Then GST applies to the sale whether its profitable or not. Sale is not a CGT matter so full tax appliesBUT it doubtful a profit would even occur on a lot you buy to subdivide unless you have owned it a while