VIC Are H&L packages REALLY as bad as everyone says?

Discussion in 'Where to Buy' started by C4tg1rl, 6th Sep, 2020.

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  1. C4tg1rl

    C4tg1rl Member

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    I would agree that yes, a lot of H&L are probably an awful investment (if they’re out in the middle of nowhere with no good amenities planned and walking distance to nothing) but surely, if you pick one of the best estates in the area with great amenities and pick a prime location within that estate, (think walking distance to schools, shops, business and parks etc) surely it can’t always be a bad investment? Everyone’s always harping on about how H&L is the worst investment ever but is there every any good outcomes with H/L? Especially if as an investment these new estate areas generally have higher yields and are generally more owner/occupier owned which is preferred. If I plan to hold for 20y, is it a better investment than buying closer to the city because of the yield and potential growth? It is higher risk sure, but also higher potential reward if you’ve picked a good lot? The estates are new and their potential hasn’t been reached yet where as established and closer to city had already reached its potential, so doesn’t it make sense that in long term 20y the new estates on the outer suburbs could have better investment opportunity? Or is your money still better off elsewhere in already sought after areas?
     
  2. The Y-man

    The Y-man Moderator Staff Member

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    As with anything, it comes down to experiences and choice IMHO.

    The Y-man
     
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  3. C4tg1rl

    C4tg1rl Member

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    I have no experience and option of choice ‍
     
  4. Trainee

    Trainee Well-Known Member

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    When your investment plan is 'I don't have experience but I'm sure some people have made money in these things, right?'......
     
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  5. Archaon

    Archaon Well-Known Member

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    Be wary of "proposed school" or "Proposed shopping complex" these very well may not eventuate at all.
     
  6. The Y-man

    The Y-man Moderator Staff Member

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    Same here - that's why I have stayed far away from them.

    The Y-man
     
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  7. Shogun

    Shogun Well-Known Member

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    20 years time closer to City will probably be even more desirable.

    Some of the better (cheaper) buys in Perth seem to be in suburbs 20/30 years old
     
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  8. thatbum

    thatbum Well-Known Member

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    Would 100% agree with this. Matching up the 'new estates' in Perth from 20 years ago, they have done terribly when compared to established suburbs closer in.
     
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  9. ashish1137

    ashish1137 Well-Known Member

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    It depends on estate, suburb, area selection, demographic and your price point. Further, how early you enter, how much land is available before that and after that, how much land can be released, etcetera.

    Till date, I have only been able to capitalize on buying land building new houses on it.
    And there are ample examples of investors on forum and outside who have capitalized by following this approach. :)

    But everyone to their own. :D

    Regards
     
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  10. mickyyyy

    mickyyyy Well-Known Member

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    @sash is the H&L package KING on this forum and dare say better than most of the professionals you pay 10k plus. He is looking at others across the country which I spoke to him about
     
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  11. Westie

    Westie Well-Known Member

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    @sash is the absolute H&L king of the forum. By far more knowledgeable than most people you'd pay thousands to just like @mickyyyy alluded to above. I have hung on to his coat tails, learned heaps and acted on his advice (coupled with my own research, of course). Some other members on this forums have learned from him too :).

    Having said the above, good H&L deals have just about disappeared in Melbourne. There maybe some coming up towards the end of the year/Q1 or so next year.
     
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  12. spoon

    spoon Well-Known Member

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    Just like anything, no absolute answer. Even in older areas there are H&L when old estates demolished. All things have lessons learned. So, if you have done the research and looks manageable, go ahead then. Even all these talks about buying the biggest land portion and worst house in best streets, etc are just cliche. Devils are in the details. ;)
     
  13. spludgey

    spludgey Well-Known Member

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    Compare a 20 year old H&L package with a 50 year old property that would have cost the same 20 years ago.
    I doubt they'd cost the same today!
     
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  14. Codie

    Codie Well-Known Member

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    We made $100k in equity on completion which I think had more to do with careful consideration on fixture’s, fittings, upgrades etc, and we’re lucky to get a great block.

    This was 2016 and I’d say it’s worth 5% less.

    it was a stepping stone at the time so no regrets, but I wouldn’t do it again.
     
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  15. Firefly99

    Firefly99 Well-Known Member

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    Agh I think about 95% are a bad investment. There’s always going to be a few estates that buck the trend but it’s a matter of picking which one and even then it’s a big risk.
    I vowed to never, ever, ever buy in a new estate and guess who did (for their PPOR)?! It is an exceptional location though (not your average low SE estate) and land was about $400k when we brought in 2016, the same land now sells for $800k.
     
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  16. mickyyyy

    mickyyyy Well-Known Member

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    Why wouldn't you do it again?
     
  17. mickyyyy

    mickyyyy Well-Known Member

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    Most cases in life you have to spend money to make money which most ppl don't realise. Which suburb and estate if you don't mind me asking?
     
  18. ashish1137

    ashish1137 Well-Known Member

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    Nice.
    I did it once, then twice, then three and four and now five and six...

    Please someone help me with more strategies. :D


    Cheers
     
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  19. Codie

    Codie Well-Known Member

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    1. Because it’s now worth at least 5% less than that valuation in 2016. No growth (Often typical of H&L estates if there’s more land to be released)

    2. More land has been released and more “new” houses are being built only just down the road. If I was to sell, my 4yr old houses with 4yr old finish’s is competing against these

    3. I’ve realised a lot of the buyers in these estates are FHB or often take up low deposit & stamp duty concessions.

    Considering all of the above, why would anyone choose to purchase your home over buying or building new? Your at the mercy of land running out or developers opening up new lots. There’s also Minimal drivers when it comes to income growth.

    I have no doubt I won’t be seeing growth for another 5yrs, even then I’m sceptical. And mine is one of the best houses, in the best estate, on a great street. That’s 9-10yrs with no growth.

    EDIT. The only thing that will lift prices/growth is developers upping land price considerably, or build costs rising.. and more than the amount of depreciation that the house would have suffered within the same period
     
  20. Firefly99

    Firefly99 Well-Known Member

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    It’s a small boutique estate on the beachfront on the Sunshine Coast.

    I don’t live in Peregian Springs but it is an example of a new estate that has done really well despite the tiny blocks and FHB target market.

    I still wouldn’t buy in a new estate as an investment, it was just luck that it worked for us.
     
    Last edited: 8th Sep, 2020

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