Ideal land/dwelling ratio?

Hello guys,

I would be very curious to find out what you think about the ideal land/dwelling ratio.

The houses I'm looking at the moment have this ratio between 50-60%.

Many thanks!

 

I think each council has allowable maximum ratio? My preference is 1/3rd house and 2/3rd land but that's me

 

Thanks mate.

I meant the ratio in dollar value, that is site value/list price..

 

Seems like another one of those piece of string questions - it really depends on the strategy for the site.

Otherwise its like saying apartments and land banking/development is all rubbish because it doesn't fit into a neat land/dwelling size ratio.

 

If you are looking capital growth then 60 to 70 land - but area, price and demographics play a big role and can change that.

 

Thanks mate.

Could you think of an example where 50% ratio would be good due to the factors you mentioned? I'm looking for CG and some of the properties I'm considering range 50-60%.

 

Well said

 

Perth 02 Sydney 11?

I do not know. I am not a forecaster. I know some very successful people who do this but me - just an educated guess.

 

Thanks Ross

 

I have never calculated it. Actually I don't know how big and of the rental property houses are. This is not one of my criteria purchasing. I buy for development potential. Ratio of building to land does not come into it for me.

 

Hi everyone, I've been eyeing a townhouse in Melbourne, it's around 12km from CBD so there's no apartments in the area as yet but am seeing townhouses growing in numbers.

The place is probably > 5yo so no work is required to rent it out. Passive strategy.

Now my question is how do you assess a townhouse in terms of preferred land-to-building ratio?

For a house you'd want it as high land ratio as possible (say 60-90%) and I reckon the land price in the area is ~$1100/sqm based on sold prices of land/run-down houses. The townhouse land is only ~200 sqm but then compared to a house it's a two-storey building, so what's considered an acceptable ratio from an investment perspective for it to be considered 'acceptable'?

The yield is probably around 4% so given it's not stellar I'd thought the building % value can't be too high for there to be an investment case? Long term hold is my preference.

Thanks!
Pete