Buying 7 acres with house as an IP

Hi everyone, i was wondering what was everyone's opinion on buying a property with 7 acres and a house on it. Could get it for about 250k i reckon. its situated about a 10 minute drive from the town, what would be the negatives of this and do farms rent out easily? any information or personal stories would be great, thanks in advance

 

What's the advantages you see in purchasing that property vs buying a standard house and block somewhere else? Whats "the town"?

 

If you have to ask how to handle a 7 acre property and whether its easy to rent out, you probably shouldnt buy it.

 

Are you close by to this IP?
Are there lots of acreages of similar sizes in the town?
Is the house worth $250k and the land is then free?
What is it zoned?
Can you get creative with the land (i.e. horse agistment, market gardening etc.)?
What rent could you get for the house?
Is there medium-long term subdivision potential?
Heaps of questions I know - but there is always a way to make money out of a property!

Friends have 10 acres in inner city Brisbane - they have agisted 5 horses on the block @ $75pw per horse. Horse owners are responsible for maintaining fences/waters etc. and cleaning up the block.

Fantastic that you're asking questions though - that's a great way to learn things! It's much better than learning from your mistakes I've found!!

 

Your yields are usually terrible as not many people let alone tenants want to maintain 7 acres.

You could including garden maintenance but this will effect the CF in a negative way.

Trees growing on the property can hinder your growth as the next purchaser might not be allowed to knock down trees of a certain size (diameter) so you want to make sure the area is well maintained as you can easily keep cutting back new tree growth if they do start but once they have formed it becomes costly which hurts your growth.

What would you allow the tenants to do with the land? Most tenants wouldn't want to start a farm unless it is under a commercial lease.

What are the chances of zoning laws to change to allow subdivision - what if this never eventuates?

From what you have posted I would suggest against it as it harder to find and secure a tenant than a regular house on a regular block.

 

You know, the town, the place to be!

 

We have a 5 acre farm in the south west of Sydney. It has had an enormous amount of capital growth so we are vary happy with the investment.

In terms of managing it, I would recommend getting an agent and have additional conditions to cover what the tenants needs to do to maintain the condition of the acreage. From experience, getting quality tenants has been quite challenging so be prepare that it might be vacant for a month or two when one leaves since the pool of tenants that wants to maintain the acreage is very tiny. You might also want to get someone to use the farm for primary production as it will exempt you from land tax.

Acreage close to urban centres are typically have a very good capital growth but generates very little yield so you will need to have a decent income and a decent buffer to pay for the holding cost.

 

Hi

My opinion would be determined by why you have chosen this particular site and what you want to do with the site in the future? If it is just purely for rental well maybe it isn't the best choice, but if it has some other potential added to it based on the town that is nearby and perhaps one side of the lot abuts existing residential than it may have lots of things going for it.

Do you live close by? Are you prepared to maintain the 7 acres because chances are if you are just renting it out a tenant may find the 7 acres a huge negative. Is it a one horse town or an area with huge growth potential? What is the current zoning of the land?, have you spoken to council's planning department about the site?

Lots of questions but if you want it to rent out now and perhaps retire to the location in the future many of these questions are irrelevant.

Regards,

alicudi