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Do you know about property investment? Please help!

Which property will increase more over 10 years?

  • 800sqm block with usual 20 year old house

    Votes: 32 94.1%

  • 250sqm subdivision with a brand new villa

    Votes: 2 5.9%
  • Total voters
    34
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Profiteer

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I'm looking at purchasing an investment property. Both properties are located in the same suburb. The suburb is located about 20 minutes to CBD. The crime rate is low and AFAIK there's no public housing. After purchasing, I only have $5k to repair or renovate. Historically, which property will increase more over 10 years?

a) $400,000 - 800sqm block with an average condition 20 year old house (3 bedroom, 1 bath).

b) $400,000 - 250sqm subdivision with a brand new villa (3 bedroom, 2 bath, modern kitchen).
 
Re: Do you know about property investment? Please help.

Profiteer said:
I'm looking at purchasing an investment property. Both properties are located in the same suburb. The suburb is located about 20 minutes to CBD. The crime rate is low and AFAIK there's no public housing. After purchasing, I only have $5k to repair or renovate. Historically, which property will increase more over 10 years?

a) $400,000 - 800sqm block with an average condition 20 year old house (3 bedroom, 1 bath).

b) $400,000 - 250sqm subdivision with a brand new villa (3 bedroom, 2 bath, modern kitchen).
Click to expand...
Pretty broad question, but all things being equal go the land.

(God knows why you would invest right now)

(Haven't been in RE for 5 years)

(Have no qualifications to provide advice of any type. Any.)
 
Re: Do you know about property investment? Please help.

(A)

The value is and always will be in the land.

Is (A) on a corner block?
 
Re: Do you know about property investment? Please help.

I voted the land,.... but it depends on the location and there are alot of other factors to consider.
 
Re: Do you know about property investment? Please help.

The older homes have a lot of advantages.

1. They are on larger blocks of land.
2. They are closer to the "HUB"
3. Position, position, position. The three things to look for in real estate. The older ones usually have it.
4. They are often underpriced because they dop not appeal to the MacMansion generation.

No comparison really. Age wins over youth again.
 
Re: Do you know about property investment? Please help.

What about maintenance cost on the old house in the next few years?
 
Re: Do you know about property investment? Please help.

Profiteer said:
What about maintenance cost on the old house in the next few years?
Click to expand...

Spend up. You can write it off as depreciation allowance.

I am with the others - you cannot go wrong with well located land.

Subdivision - you kidding? Heard about subprime? Wait for at least 6-12 months as what seems cheap today will seem cheaper tomorrow. Most are tipping 5-10% decline in value in the outer suburbs. So you will score an immediate own goal.

Then again property is a long-term investment so if you think Australia is a good bet long-term then immigration will keep plugging along and outer lying estates will appreciate from a low base in the long term. Make sure it is near infrastructure, or proposed infrastructure, preferably rail as a hedge against rising petrol costs. You can make a bomb from subdivision if you time the cycle right (ie buy when there is blood on the land, sell when things get ridiculous).

Good luck. Personally I am all for 5-15km from the CBD. My 2c
 
Re: Do you know about property investment? Please help.

If you demolished (A) whats it worth?
If you demolished (B) whats it worth?


In 20 yrs ask the same question.

You can claim depreciation and capital works.
 
Re: Do you know about property investment? Please help.

Subdivision can certainly have it's benefits.
  • How is block A zoned?
  • What is the local authority's attitude to rezoning and subdivision?
  • Is this attitude likely to change?
  • Having a DA in place for development of block A can be a nice little earner without having to do much hard work. Just get approval and flip the property.
  • Don't actually sub divide until you are ready to sell as you will be paying extra rates.

With Block B, the depreciation schedule will be excellent for a new property as opposed to the older property.

What do you hope to acheive from the purchase? Is it just capital gain?


As to the timing of buying property, it is always the right time to purchase property. It simply depends on your negotiation skills when crunching an agreed price.



cheers,
 
Re: Do you know about property investment? Please help.

Hi,

Historically, which property will increase more over 10 years?
Click to expand...

This is a no brainer given the same location.

Right now you are looking at new vs old. In 10-20 years you are looking at old vs old for the same properties, one on 400 sqm, one on 800 sqm.

Land appreciates, buildings depreciate, that's why they give you a tax deduction for the building.

You want appreciation over your time frame, go for the property that has most of its value in the land.

brty
 
Re: Do you know about property investment? Please help.

It's very hard to know whether a specific house will do well. A friend of mine moved into a nice neighborhood close to schools, public transport, etc, but then a motorbike gang member moved in next door. There is no way you can prevent something like that.
 
Re: Do you know about property investment? Please help.

I would be for the land (A) as this is part of my investment approach looking for properties with a twist IE. properties that I can develop into providing more return.

There is a lot more to this then just our opininons, you need to know which is right for you and your goals.
you may only have a short term view which is different to me I want to hold for ever.
You maybe after quick gains not long term gains
you may be after rental return not capital growth
etc, etc, etc

anyway my vote the land always the land.
 
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