Vacant Land in Toongabbie NSW

Profile - young family - me and my partner early 30s with one kid, both working higher tax bracket.
Capital growth is more important for us than rental income.

I have got 550SQM land (knock down rebuild) R3 Zone in Toongabbie (close to station -Road - Wentworth Avenue). I am a newbie in the property investment therefore seeking guidance to make a better decision on this investment property.


1. further investment $450k to build attached 4 BR single story house and a 2 BR granny - potential return - $900-$1k rental return.

2. Since I can't build a duplex(minimum land size council req-600 SQM), a real estate agent suggested I could get duplex approval under affordable housing. but this means more investment and time (sub-division cost, duplex building cost, time to build). I can only sell one and have to keep the second one for 10 years with 20% less rental income(affordable housing). Can you please share your experience if done in the past?

3. Sell the land as it is? Due to location(7 mins walk from the station) of the property, I am not inclined to sell it but if there is no good growth with extra investment then I don't want to make emotional decision.

Any guidance would be highly appreciated.

 

How long ago did you purchase?

 

@Property Twins

last year only we bought it... but after talking to few real estate agents I am not sure about capital growth in this area.. so I am a bit confused now to be honest..

 

1) Do you want to spend 450k? and keep it as an IP. I also believe the rental return is quiet inflated but even if it is 7-800pw the 450k will depreciate and the growth of the land must be more than that just to keep the value

2) Building a duplex on a 550m2 will prob cost 700k+. Again do you want to that. While you might get your money back after selling one unit and paying all the fees (remember council contribution, subdivision, agent fees, taxs etc), your then stuck with a discounted rental duplex which you will have difficulty selling.

3) Sounds smartest. If your concerned about missing out on the growth in the area, have you thought of selling your vacant land and purchasing something equivalent with a rentable house on it. Im sure it wont cost 300k-450k more and that way your getting some rental income to subsidise ure costs while you hold onto your investment

 

Thanks mate for your inputs... can suggest few areas for me for focus to buy a rentable house with decent growth as per option 3?

 

I can't recommend anywhere but I was implying if you think Toongabbie is good then replace your land with an existing house in an equivalent location

 

I think Toongabbie is undervalued in comparison to surrounding areas. Its 15 min to Parra, 10 min to Blacktown, 10 minutes to Norewest - its very well located.

What had you form the opinion re capital growth in the area?

Real estate is a long term investment - many people think they are entitled to have gains almost immediately. If someone promises you this, then they may be looking at short term growth - but for something which may be dud long term.

It may take some time for growth - given you purchased in 2020 - Sydney had its peak in 2017, and we are only getting past the 2017 levels.

 

Why do you want to sell the land given you only bought it last year?

 

Thanks @Property Twins for your inputs, the real estate guys i spoke with suggested that North West especially North Kellyville and Box Hill areas have better growth and potential than Toongabbie thats why this second thought and seeking advice here

 

Thanks @Mumbai, the real estate guys i spoke with suggested that North West especially North Kellyville and Box Hill areas have better growth and potential than Toongabbie thats why this second thought and seeking advice here

 

Not necessarily. Toongabbie is well located, I don't think you'd go wrong here.

Though - buying across the train on Wentworth Avenue is not ideal, though as an upside, you have R3 zoning - which is good from land banking perspective.

 

thanks @Property Twins for your inputs. based on this investing anther $450k for single story 4BR house and 2BR granny would not be a bad investment... any other recommendation or suggestion from your side?

 

Buy next door and get a block that you can develop to the maximum allowable under R3

 

@Scott No Mates , I did check with him and he is not interested to sell at the moment..

 

Also to add...westmead hospital is 5 to 10 min drive. Have you gone past it recently? I was amazed how many new buildings/ extension to the hospital have popped up.

The downside I see with vacant land is cashflow drain, which would prevent you from expanding your portfolio (assuming this is what you want to do).

 

the $450k for build of house and granny flat sounds a little on the low side.

However a spend of $500k or so to build to earn $1k a week in rent sounds like a great return

 

You should count it as 500k+ land price to earn 1k a week as return not just on the build

 

Real estate guys make money when you buy/sell.
I don't think anyone knows how any suburb will perform. If it is that obvious, then the price is already counted for it.
If it is me, I would design such a way so that the granny flat would look like a detached house.

 

thanks @devank for your insights.
can you please elaborate on "design to look like detached" or point me to that sort of designs?

I thought building something like below (single story house and granny -like a duplex) with fire grade wall between the main house and the granny should not decrease the rental return due to privacy issues.

 

8 would make the garage longer to get rid of wasted land/brickwall and add a skylight rather than window to the bathroom.