Making Money on House & Land Packages

Discussion in 'Development' started by sash, 10th Apr, 2016.

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  1. mrdobalina

    mrdobalina Well-Known Member

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    Landcorp has been selling a lot of infill sites recently.
     
  2. MTR

    MTR Well-Known Member

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    Unfortunately wrong timing though.
     
  3. Connor

    Connor Well-Known Member

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    @sash

    Great post, One of my strategies has pretty much doing the same thing over the last few years. Made a decent gain on some infill land in SE melb in 2010 and have one on the go in Officer as well. Small lot 3/2/2 home. Land settles in Sept, but even if it's delayed thats fine. The free equity ride it great.

    Been looking out in Melbs West for my next small lot build but the market out there is smoking hot!! Prices have really increased and its getting harder to make the numbers work on the new stuff.
     
  4. sash

    sash Well-Known Member

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    Yes...where about in Officer..is it Arcadia...I got in there at 144k for the land
     
  5. Connor

    Connor Well-Known Member

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    Yes Arcadia. Your land was a steal at 144k. Paid 156k, getting a 3/2/2 on there for finished for around the 165k mark plus a few upgrades.
    I'm hoping H&L prices should be starting in the high 300's there by the years end. Nice little gain and a neutral to positive property.
     
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  6. sash

    sash Well-Known Member

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    Brilliant is it one of those 12.5 by 21 deep blocks.

    Also who are you building with Dennis Family? PM me if you don't want the whole world to know.

    The land now starts from 165k...and is 294sqm blocks are I think at 180k odd now....and these are with easement issues.
     
  7. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    I'm a huge fan of building and some land estates are pretty awesome with some of the incentives that they offer like free fencing, free front landscaping, solar PV rebates etc.

    One of the other major draw cards is that you only pay stamp duty on the land. If you are paying stamp duty on your $150-200k block of land rather than the $350k end product you are keeping more money in your pocket for the next deal.

    I'm tweaking up some of the opportunities in land estates by finding some blocks that have the right zoning to be duplex blocks but aren't marketed as such. These do create small 3 x 2s but if you go double storey framed the footprint is smaller than a larger block and a single storey 3x2.
     
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  8. Daniel007

    Daniel007 Well-Known Member

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    Great post Sash, it's quite an insight to a strategy that isn't really discussed on the forum.

    From reading all the posts, it seems like it's a bit too late to be getting into SE Melbourne. For someone in the position to buy in 2-3 years, where should we be looking at next for H&L?
     
  9. teetotal

    teetotal Well-Known Member

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    Look for Melbourne west. Lots of land estates are growing up there. 20-30Km from city and decent prices too with new infrastructure being built.
     
  10. sash

    sash Well-Known Member

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    Ta.....I would definitely say Perth....there some infill sites there are really good prices...if you get in now with a view to it coming good in 2019-2020...you should do ok.

    Patience is the greatest creator of wealth.....some estates in Perth are offering 25-40k off.
     
  11. Bran

    Bran Well-Known Member

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    Great post and thread Sash.

    So, is @Tekoz onto something? Should we revisit Yarrabilba?
     
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  12. meme plecko

    meme plecko Well-Known Member

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    I can't believe that you had any doubts about Tekoz strategies ;). But, seriously, if Sash said that he bought in Park Ridge, so many here would follow...
     
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  13. Daniel007

    Daniel007 Well-Known Member

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    Cheers guys.

    Serviceability doesn't permit anything at the moment so i'm on the sidelines until 2018. I'll start doing some research on Melb west/Perth in the meantime though.
     
  14. sash

    sash Well-Known Member

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    Another interesting strategy which I am now using is pushing out lazy building companies allocated land.

    In most estates the developer has a relationship with quite a few building companies. Typically they will allocate a few blocks. I find in some instances they have have not moved certain blocks for some reason.

    So what do I do? I call the developer and ask if I can buy the land but not use the building company. I am finding this is now working on certain estates. The best thing is I can build on the land for 40-50k less than some of the larger builders. You need to have a thick skin...lots of nos and negotiating before you get to a yes.
     
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  15. dissimulo

    dissimulo Member

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    I was actually looking to go for a H&L package in the west as my first home.

    There were a few H&L packages in the truganina area, 300sqm to 330sqm with 3/2/2 (Two living areas) for around the 370k mark.

    Would I be able to save some money if I were to go and purchase the land myself and then look for a builder?

    What would be a good price for a 300sqm lot in Truganina or Tarneit for instance?

    Thanks
     
  16. Connor

    Connor Well-Known Member

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    The general idea is that rather than buy a H&L through the builder, hence being tied to them. You purchase the lot direct from the developer thus giving you almost infinite options on builder selection and a better control on cost.
    After alittle research you'll know who the better value builders are.

    The other benefit is that while some builders give you limited options on altering their floor plans, and charge decent $$ if you do, other builders allow you limitless changes to complete redesigns at no cost. For me this is a major positive. Especially when it comes to designing homes on smaller lots where space is limited.
     
  17. Observer

    Observer Well-Known Member

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    This is similar to what I did @sash.

    Initially I put down a deposit for a block of land from Landcom in SW Sydney in Sept 2014. I found the builder and was about to finalize and sign the land and construction contracts with the developer and the builder when the builder listed a new great H&L package in the same area. There were very few on the market at that time selling really fast in a matter of hours. The block from that H&L was one of the two remaining blocks from earlier land releases. Thus, the land price was significantly lower than the market value at that time. The house construction price for that H&L was an ok market value. Thus, I decided to grab that one if I could. I was fast enough to switch from my initial block to that new H&L package. The contracts were signed in Oct 2014 with the land price of $255k and 4/2/2 house construction price of $240k.

    The land is just about to register now as there were a few delays (which I did not mind as the holding cost is close to zero) and the construction is expected to start soon. The current market value of land is $400k-$420k and the house construction price is also a bit higher (not sure about exact number). The finished value in the current market is $670k-$700k. Thus, great CG and once the construction is finished it's likely to be neutral/positive geared.

    The other nice option is the block is just big enough to be able to put there a granny one day with separate access providing the numbers work and there is a demand which would allow to boost my borrowing capacity.

    It's also interesting to note that one of the reasons for going down this path was that I did not have enough deposit to purchase an existing property at that time. To be able to pay the 5% holding deposit for that H&L I had to use my credit cards. Though I do have a stable job/income and I was sure that I would be able to save more money and finance come the settlement time. Otherwise, it would be risky to do this.

    Another bonus is that as the land price is higher now I don't have to put down more deposit as the bank can lend me the remaining 95% (servicing still works fine).
     
    Last edited: 13th Apr, 2016
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  18. lisawithane

    lisawithane Well-Known Member

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    Really interesting strategy. Do you see any opportunity for H&L in Sydney? I live in the north west of Sydney and the land prices here seem to be outrageous and continually more land is released.
    I imagine this strategy takes a lot of effort though with managing building companies or do you have a good relationship with one and just keep using the same company?
     
  19. sash

    sash Well-Known Member

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    Noice...well done!

     
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  20. Sunny Bill

    Sunny Bill Active Member

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    Some really good opportunities coming along in Perth at the moment. I think in a few years people will look back and wish they had purchased now. I have seen a house and land package in Shorehaven, Alkimos (600 metres to beach) for $371,000 (including site costs) plus other great house and land packages all along the northern coastal corridor. Also development opportunities such as a large 4x2 in Yanchep on 587sqm of land (being rezoned to R60) for $389,000. I am looking to pull the trigger shortly on another purchase.
     
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