Browse Forums Home Finance 1 Oct 25, 2017 12:33 am Hello Apologies if this is not the right forum to ask. Basically, I have put down a deposit for land and signed the contract. The settlement is approximately one year away. Will be building our first home on this land. Now, I have some amount left (originally saved to purchase a house to move in but could not afford the one we liked in current market so went for a land instead and buying us some time) enough to put in 10% deposit for another block of land. What I was wondering and need some advice on - will it be a good strategy to go for a 2nd block of land which will have settlement about the same amount of time away. Kind of from investment perspective with a hope that the land value will increase (the current trend for the area I'm considering is up) and sell it before or after settlement. Obviously the intention is to get some extra cash to put towards the building cost of the house on the 1st block. I'm completely new and was wondering is this something doable. The amount I have now (~40k) will sit in bank account and will probably get about 1k in one year time so was thinking if the above can be done. If so what are the risks? Here are some numbers if that helps. 1st block - 320k - paid 32k as deposit - building cost ~300k (approx.) 2nd block - 250k - can pay 25k now Income 130k (single earner), a family with my wife and a daughter. 40k at hand now (after deposit on 1st block) Thought about keeping both land but don't think will be able to secure finance hence thought of selling during or after settlement. thanks in advance Re: Is booking a land and on-sale later a good strategy? 2Oct 25, 2017 7:42 am Hello dream2017, we have just done this too. Our first block is due to register sometime this month and we have just put down a deposit for a second block. The second block is currently approx 2 years away from registration. Our first block got valued $100,000 more then when we brought it a year ago. So we thought we should buy another well priced. Lock and get it whilst land prices are rising fast. We are in Northern NSW, minutes from the beach so fingers crossed itβs a good investment. Hope this helps a little π Re: Is booking a land and on-sale later a good strategy? 3Oct 25, 2017 11:06 am No one can advise if you should for sure, as noone has a crystal ball, more's the pity. Its a risk you're taking and you're trying to calculate the risks - I understand. My question - did you need the $25k for the first block down the track, as you have no control over timing for the second block to be in a state for you to get your money out? And if you cant sell the block down the track, what then? If you can satisfy those answers to yourself you'll be clearer on the risks to your first deposit. Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Is booking a land and on-sale later a good strategy? 4Oct 26, 2017 8:46 pm @mj-mac4 - thanks, yeah was thinking something similar. Although I guess having the second block registration 2 years away while the first getting registered soon makes it manageable, no? Thanks for sharing the info, that helps. @becjarrettdalton - thanks. you mean when securing for the land loan? I will probably be able source 6/7% of the total loan (land + construction) when it comes for registration. Or worst case defer the build and only go for the land loan (I'll have 10% of the land loan by then) until 2nd block gets sold. Then, hopefully, use the gain and equity on the 1st to secure construction loan. So, yeah I could leave without 25k when time comes for the first block. I'm just trying figure out if this is a valid thought/strategy and in case I'm missing anything as I don't know how the buying/selling, loan etc works in detail yet. Re: Is booking a land and on-sale later a good strategy? 5Oct 26, 2017 8:50 pm As long as you factor in your costs - stamp duty on purchase + legal fees and agents fees + legal fees on sale you can make an educated decision, but you're gambling on the return and only you can make that call for yourself Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building 2 6360 I'm based in Adelaide and I'm considering purchasing a house and land package from Weeks Homes. I found a deal that looks good, but there's a complication: the land isn't… 0 1362 Hi everyone, I'm very new to the housing market and would appreciate any guidance. I have found what I think is a good land and home package. Marketed as "turnkey".… 0 690 |