Affordability to build a home on land owned outright

Discussion in 'Development' started by noah35, 24th Mar, 2018.

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  1. noah35

    noah35 Member

    Joined:
    21st Mar, 2018
    Posts:
    5
    Location:
    Adelaide
    Hi all,

    I currently own 2 properties, one with an existing home and another with vacant land. The existing home is valued at around $380k and the vacant land about $230k. I have a current loan of $480k, which is quite large because I had to pay out my ex when we separated, so that I could keep both properties.

    My intention in the unforeseen future is that I would like to build on the vacant land. However, I'm not sure I can afford it. My pre-tax salary is $87k. I am still in the process of renovating the existing property and would like to sell it - I'm hoping to at least get $380k from it, which would leave me with a loan of $100k.

    Construction cost will be about $250k, which means my total loan would need to be $350k. I pay $780/m for child support from my pre-tax income, and am also looking at getting a novated lease car.

    Could anyone please provide any guidance or advice as to whether I can afford to build? Thank you so much.
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,675
    Location:
    Australia wide
    Best to see a broker - no indication of living expenses, other debts, repayment amounts, children, spouses etc given.
     
  3. Morgs

    Morgs Well-Known Member Business Member

    Joined:
    7th Dec, 2017
    Posts:
    1,791
    Location:
    Sydney NSW
    Definitely see a broker to look at all options.... as a general comment I would hold off on getting a novated lease for now as that could kill your serviceability
     
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