I've asked a couple of people here and have got some great advice, so now I'm reaching out to the wider audience for any advice. I'm 32, have a job that pays $121k, single, no kids. I don't have much savings as I've spent a lot of money elsewhere. I bought my first block of land (18x32) in Waratah estate in Mickleham back in May 16 for $249,900 (10% deposit) and comes with front landscaping. Comparable blocks in another neighbouring estate are going for $281k, with no landscaping. I'm planning on living in it and have put down $1.5k to build/lock in the price a 34sq house with burbank. All up, with fees and specced up, this should cost me $550k. I added things like extending the garage by 2m (42sqm garage) and a 2nd master bedroom with ensuite as it was a 5 bedroom home. so it's not a 4/3/3 with a grand alfresco. The 550k includes driveways, back landscaping, decking, fencing etc. so it covers absolutely everything. I made those structural changes to the house in order to increase the equity, as resale value on something like that would be far better. Especially for the demographic of the area with a lot of migrants who see a lot of family come to stay with them from overseas for periods of up to 6 months at a time. So lots of bathrooms are a necessity. How much roughly, does anyone here think it'll be once built around this time next year presuming it titles in June 16? I know we can't predict the market, but a rough estimate? Hopefully by then, if I have enough equity, i can buy another H&L obviously much smaller/less specced up and get the ball rolling on a portfolio. Or would anyone consider doing anything else? Keen to dip my toes in to the property investment land. I know I should have probably done that instead of buying a house to live in, but it is what it is...
Hi Mate, The location and time you chose is good. However, I hate to break you that you have spend too much on build. Also too many customizations lead to extra cost. The standard spec home which have everything are apt cost from the builders without much modifications. More customizations and more Stuctural changes means more cost. You might get about 10% equity but don't count on the number. Have you worked out what is the current price of similar houses? Such big houses are only for people to stay.i wonder anyone will be thinking on the same lines while paying for such houses. Banks also evaluate builds on minimal changes. You will get an appreciation on land, but personally, i feel that would be compensated by build cost. Even on a smaller 3 bed 2 bath 2 garage, people were able to get 60-70k equity in a span of 1 year for a fully complete home. Example, extending a garage by 2 mt. Isn't that a waste of space? Why would someone pay more for that. Infact a basic 39 sq mt garage would have fetched you a similar cost. Additional room with ensuite. Did you worked out the demand in that area? An Indian friend of mine is also building asimilar home but on 450 sq. Mt of land. Though his purpose is solely a house to stay. In no sense i am discouraging you. You may even get good equity (no one can predict futute) out of it. But from my limited experience, either you build to stay or invest, and if you build to stay, spending a fortune on customizations and structural changes, don't expect too much out of it. Regards
Thanks for the information. You're probably right and I definitely could have done something else. But because I made the changes pre build, to have a larger garage and change two beds in to one master ensuite, all up, it costed me around $12k. It would be far more had I done that after it's built. That was my rationale in doing so. Also, I'll be living in the house for a few years and wanted the garage larger to put a gym in. Also, I got a roller door on the rear of it so if someone has a boat, jetski etc. they can wheel it through the garage to the back. Those structural things I thought would have also added equity, not just cost. But hey, if I get some equity out of it and use it for another property while living comfortably, I'm happy for the time being.
I doubt you will see any equity once built. Many people assume later stages advertised for a higher price means their earlier stage land has increased in value. It's generally not the case, as bank valuers need comparable resales. They can't use developer sales in their reports. The only resales happening in new estates are people divorcing, losing jobs etc, forced sales. In your case the developer threw in landscaping, in the later stages there will be other under the table discounts, freebies etc. I've seen overseas holidays, new cars and cash back of $10-20,000 on land sales from developers. Landscaping isn't a big cost either. Maybe 2-5k. It's something that's only noticed by the valuer if it's not there, mown grass and a driveway would give the same valuation as roses and box hedge 9/10 times.
