Making Money on House & Land Packages

I'd like to do this for my next purchase. The reno's on 60 year old houses are great but can be maintenance issues and little depreciation. So H&L looks the goods. Well done sash.

 

Really hard to do this especially if you buy interstate, I know exactly what you mean. Getting small lots and first stages is becoming harder and harder.

Smaller lots are usually more expensive. 3 stages ago Arcadia was selling 264m2 @ $166,000.

 

Actually I got mine for 144k...and that was about 294 sqm.

I think they are now somewhere around the 170-175k mark...but you are looking at Q1 2017 or later titles.

 

• Sash a well explained and risk averse strategy which includes a balanced component of active value addition as well as passive CG in growth areas, without relying on taxation Shenanigans (NG). Very helpful to the newcomers and the low income investors.
  
• If I remember correctly, you had also given some valuable and concise advise on Somersoft on finding out growth areas based on upcoming public and private (Macca's) infrastructure spending. Is it possible to provide that link/information again (PM if appropriate), as that constitutes a very important part of the development on H&L.
• Once again kudos for your generosity on sharing and explaining the recipe rather than narrow focus on the dish. Extremely educative, well illustrated and employable thread, as compared to other number crunching posts with pictures, which just focus on what has been done rather than how and why.

 

I got the price list recently, and the 14x25s were sold at $165k in stage 8 titles Q1 2017. They have more they will be releasing but might be your $170-175k figure.

 

Wow.....that is pushing it along nicely...if they hit 175k...a nice 30k gain just on land and potentially another 10-15k in building costs. That would make the median for a small 16-17 sqm 3x2x2 fully complete exactly as you said (I think it was you) who said would start from 370k plus.

 

Anyone heard of Roxburgh Park Central project?

 

Yep $370k+, if you buy from the marketing groups you'll pay $400k with all the coms. So on refinance at complete you should start pushing higher valuations based on latest settlement data.

 

I am happy with that.....my build cost is probably going to be 320k fully complete. If the end product vals at 400k...that is a nice return on competion of 20% plus...so I am in the money.

 

no you are out of the money...

At an 80%LVR you have all your working capital out of the project and are in a free equity position exposed to future capital gain at a neutrally geared position.

This is my aim on my H&L investments. If you can keep realising your working capital, you can keep going immediately. in most of mine I will have between 75-100% of my original equity out on refinance.

 

Exactly...noice......that is what I am doing also.

 

Must be an old price list, I would have been all over them at the 165k mark.
14x25s have been around the 200k mark for a few months now. 315sqm around the 190k.

Prices are really pushing up in that estate now, totally agree, very hard to get a completed house there under $370k now.

 

Sorry I meant 14x21m my mistake!

 

In reference point 2.

I read the following for ideas in terms of up coming infrastructure:

1. Read the local rags...you can get most of the info off the net
2. Read API, YIP...they usually have articles about infrastructure
3. Hotspotting also offers articles
4. Follow Bernard Salt, Mark McCrindle gives you where the demographics are heading
5. Google is your friend...look real estate hotspots
6. Finally...where I find the real gems is to get on the ground an talk to the local *****s...even if they bag a suburbs go and have a look. get their views and then make you own decision
7. Think outside of the square...I specialise in blocks which no one has a house for and design one myself. Just recently 2-3 of us on the forum have done this collectively..I got nothing out of it. The funny thing is I offered this to a few people and they turned their noses up at it. Oh well......

 

some are probably slow learners like myself.

 

I don't recall I offered one to you......but you have to be quick in Victoria...the demand for the affordable product is insane.

Just found one estate where the %^&W virtually dutch auctioned stuff prior market listing. People were falling over themselves to buy.

Shook my head an walked away...

 

I hate it when markets get hot like that.
Although Perth is in the doldrums I would say now is the time to buy and construct. Builders are offering all sorts of bonuses and housing estates are reducing prices of increasing incentives like $8-20k rebates.
You just can't be in it for the quick gain, in this instance, but in a year or 2 you will be happy you did it, I reckon.

 

I agree...in one instance when I queried a developer ..they were willing to do 40k off.

But still time....too much going on in Melb...Perth will be a definite look in within the next year or so.

 

+1

Which estates/areas would you look at in WA?

Is alkimos or yanchep any good or too far out?

 

For me it's too far but if you really find a bargain then Butler would be the furthest I go as it has a train station. The furthest ones away are generally the hardest hit so that may play into your hands if you can get that bargain - just understand that it will be hit again in the future.

My picks would be Clarkson**, Harrisdale** and Wellard. Harrisdale doesn't have a train station but has a lot of local jobs in the surrounding light industrial areas of Canningvale etc so its very possible that tenants won't need to travel to CBD etc.

** I own land in Harrisdale and Clarkson - I am biaised