Browse Forums Building A New House 1 Dec 14, 2020 9:29 pm I've picked up a block of land in a new estate in Queensland. It's a smaller block (375 sqm) for $280K. We're planning to drop a $600k, 300sqm, custom-designed house on the block which should suit our lifestyle pretty well. The deposit will be ~35% of the total. I have no doubt this is overcapitalising - everything else in the area is ~$600-650k for this type of home, with a couple of outliers. And given the block is so small I'm not expecting it to appreciate much. But my partner's family is nearby, the area is nice, the bank doesn't seem to have an issue, and we're planning to stay here for the next 15 years, so may as well enjoy the house over that period. Thoughts? Re: Overcapitalising on new build 2Dec 14, 2020 10:19 pm It seems like you have thought of why you are doing what you are doing. Overcapitalizing is an issue if you are going to turn over a property quickly but if the plan is to stay for 15 yearsish and enjoy and you can afford to build the house you want, then why not? I think a lot of us build in areas/styles of houses/sizes of houses that may mean we overcapitalize but we have other reasons why we take that risk. The only thing to be sure of (as sure as you can be) is that you won't be in hard to get out of trouble, if an unforeseen event (a death/divorce/business issues) meant you had to sell quickly and at a loss. Good luck. Re: Overcapitalising on new build 3Dec 15, 2020 2:22 pm Yep like bluesteel said, it's only an issue if you think there's a chance you will be selling in the near future. We are likely heading down the same road to a lesser extent with our build but because we are building basically a house full of wish list items and we have no intention of ever leaving it's a non-issue (for us). There is nothing wrong with putting a price on a high quality of living. Follow my build here: https://www.instagram.com/ivy5custom Thank you so much everyone. This all makes a lot of sense. I guess when you talk to a builder who butters up everything to look very polished, you get to start believing… 8 2249 A person needs to be licensed to offer financial advice. Surely the accountant you use would have been chosen for his/her expertise in this field. Have you asked your… 1 3100 |