WA Are subdivisions a good buy?

Discussion in 'Where to Buy' started by Amistry6, 21st Feb, 2018.

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  1. Amistry6

    Amistry6 New Member

    Joined:
    21st Feb, 2018
    Posts:
    2
    Location:
    Perth
    Hello all,

    I am new to the forum and looking for some advice on buying a subdivided land and building on it. We are basically looking to buy a home in Leeming, Bull Creek or Willeton due to the schools there. One option we are considering is a subdivided plot around 350sqm (10m frontage) and then building on it. The total cost will be around 570 to 590k. As the size of the plot is relatively small, I am wondering whether this will be a good investment and whether there will be demand for it in the future, i.e. me being able to sell it on after 5 or 6 yrs. Anyone with experience in the area and or any suggestions on what to avoid when looking at this option?

    Thanks.
     
  2. TAJ

    TAJ Well-Known Member

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    1,214
    Location:
    Northern NSW
    Welcome.
    In the areas you have outlined what are the typical dwellings? Are the land parcels all of similar size? What are you actually getting for your 570 - 590k?
    More importantly what are your long term goals?
     
  3. Amistry6

    Amistry6 New Member

    Joined:
    21st Feb, 2018
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    Location:
    Perth
    Hi Taj

    Thanks for the response. Typical dwellings in that area are older houses (80’s era) typically 3bdr 1 bath with plot sizes around 700sqm plus. Older houses needing a Reno are around the 550 to 600 mark and those that are refurbished on the original plot go for around 700 plus. For the 570-590 I am getting a turnkey 4bdr 2bath 2 garage house. The area is popular for schools and access to highway and hospitals. Although there are some subdivisions popping up in this neighbourhood it’s still unknown what the long term outlook would be for such a place. Long term goals are to stay here for the next 3 years minimum possibily longer (6-7yrs).
     
  4. strongy1986

    strongy1986 Well-Known Member

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    24th Jun, 2015
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    Location:
    VIC
    Well seeing as its not your forever home i would probably buy the big block old house and if you can afford to subdivide when you move out. Hopefully values will have increased in say 5 years time and you will be able to subdivide and build 2 homes for around the 1.2 mark. If end values are say 800k in 5 years then you make 400k

    If you buy the new house on the small block now and sell for 750 (house may be out of trend by then) then youve halved your gain

    Note that the first strategy requires a bit of capital to maximise your profit

    Having said all of that - at current values the 590k for the new house on the small block is buying at cost so not a terrible plan
     
  5. TMNT

    TMNT Well-Known Member

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    Location:
    Melbourne
    As some people would say

    Its all about land land land
     
  6. Sackie

    Sackie Well-Known Member

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    Location:
    Vaucluse, Sydney.
    Personally I think land is useless unless it's in demand areas or has some hope for it to be in demand in the future. There is heaps of land around oz worth peanuts.
     
  7. TMNT

    TMNT Well-Known Member

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    Melbourne
    Well yes . Thank you.
    Thoguht that was a given
     
    Cmelderis and Sackie like this.

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