Land & house build packages

[ladycasper]

Hi Fellow Brits,

 

Please share your experiences on building a new home...

 

Which is a better deal financially ?

A land & house package or

buy your own land and get your own builder ?

 

Can you make money from selling you own home, banking the dosh and moving into a rental, buying land and having a house built ? moving in to avoid capital gains tax, then selling after a qualifying ? period to make a profit ??

 

[coolerking]

Hi Fellow Brits,

 

Please share your experiences on building a new home...

 

Which is a better deal financially ?

A land & house package or

buy your own land and get your own builder ?

 

Can you make money from selling you own home, banking the dosh and moving into a rental, buying land and having a house built ? moving in to avoid capital gains tax, then selling after a qualifying ? period to make a profit ??

 

 

We'll be interested in replies as we spent some time considering a land and house package but was stunned by how much more it would have cost to complete the house. Some house builders sell you a shell but others will quote higher for the full cost. The full cost may not include gardens so the total cost maybe higher. We've been advised to check out different builders for quality.

 

Cooler

[Guest steph&neil]

Hi not all that savy on this subject yet, but a friend from uk just moved into her new build a couple of things you should know -

You pay stamp duty on land only - so a big saving there

You only qualify for the first home owner grant under a set amount - think it is about $400k, also you must live in the house for min 12 months!

Selling here is EXPENSIVE about $20-30K - although I know there is a new company Geko with set fee's for selling & that will saving something!

If you go with a smaller builder get it in writing the completion date, if they go over that time a set amount to cover rent can be factored in - my friends took 6 months more that planned & they had not factored this into the contract!

I will wait to see what other info is given by others! steph

[Andrew from Vista Financial]

Hi Ladycasper

 

I think generally now once a build is finished and paid for taking in to account all of the extras paid out there really isn't much profit margin in it.

 

Obviously it can happen if you can get a good deal on certain things, say land in a Suburb that is rapidly growing and increase your value that way but these areas are not easy to find.

 

I have heard stories of late that when the Bank have gone to value the land and build package for mortgage purposes, the value is less than what it sold for.

 

As with everything when trying to make a quick buck, there is also a risk to it.

[ladycasper]

Hi Ladycasper

 

I think generally now once a build is finished and paid for taking in to account all of the extras paid out there really isn't much profit margin in it.

 

Obviously it can happen if you can get a good deal on certain things, say land in a Suburb that is rapidly growing and increase your value that way but these areas are not easy to find.

 

I have heard stories of late that when the Bank have gone to value the land and build package for mortgage purposes, the value is less than what it sold for.

 

As with everything when trying to make a quick buck, there is also a risk to it.

 

As ever Andrew thank you for your help and experience.

 

Has anyone any recommendations and good and bad builders ??

[Guest Nick11]

My big concern about house and land packages is that you buy the land, put your dream house on it - spend lots of money making it look lovely - then the guy next door builds a crappy shack next door and your house is devalued by what is around you.

I know it can work the other way - but knowing my luck I would end up with the Clampits either side of me!!!!!

At least if you buy an established property on an established street - you kinda know what you are getting!

[Guest Libby1971]

As I am sure you are aware, any building package only allows for minimal fixtures eg i light per room, 2 sockets per room, no flooring, no air con, basic fittings, no landscaping, no plants etc at all, no fences to mark your boundary, no drive, no path etc. If you want any of these, or upgrades, you pay extra. In a package, we were shocked by how small the plots were.

 

Also I agree with Nick11, you can't guarantee what is around you. And the view that you thought was amazing and bought the house, and built it in such a way as to capitalise on that view could be blocked by the moron building his house right in fornt of yours. There is a lot to be said for buying a house that is established.

 

Banking the dosh assumes you can pay the rent and the building costs at the same time. You'll need to pay for the land in full, and the builders won't build the next section until you've paid for the one before. Someone I know bought their land which took more than a year to be released to them from the planning stage of council so although they were expecting to be in their house by Jan, it took them until the October to actually be in. You'd need to build this into your contingecy plan. Someone else I know used a smaller builder, but the only way they could actually financially do it was to knock down their own house, build on the site they already owned and then move in with her mum and dad while it was being built. They could not afford to pay rent as well as meet their building costs - he's an accountant at one of the top firms in Adelaide; if he can't find a way to pull it off...

 

Your own land is a better deal of the options available but the land price will be higher if you are building outside of a development. That being said you know far more what you are getting for your money. But you may get more challenges from the neighbours which may mean the quick build you had planned might take considerably longer