Questions to ask before buying a house & land package

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A house and land package can be a great option when you want a new home. It can be a hassle free, turn key solution. However, there are a few things that you should consider before buying.

 

Here are some questions that you should ask before you sign or pay (even the initial deposit) for a home and land package.

Where do I want to live?
You know your life and your needs better than anyone else. You know where you work or can get work, where your friends and other family members live, where the things you like to do are and ultimately after doing some research of possible options, where you want to live. You should research the area of the development to determine if it is convenient for you. Can you get to work in a timely manner? Can you find shopping and recreational facilities nearby? Make a list of what is important to you and make sure that you have them in the new develop area when you plan to buy a home and land package.


What type of house and land package should I purchase?
There are two main types of house and land packages.

  1. Purchasing the land and then building a house on it. This allows you some flexibility to customise the home to meet you needs and desires.
  2. Purchasing after the house has already been built. This option means that you can move in virtually immediately without waiting for the construction to take place. This option is also  known as buying a spec home.

What designs are available?
Most people buying a new home are most interested and excited about getting a modern design with all the modern features and conveniences. The builder should have a number of different designs available often that suit different size or shape blocks. Take the time to make sure that the design that you select will meet your needs now and into the future. You may need to pay extra for additional space, but that can mean that you don’t need to sell your home to upgrade to a larger one when your family grows and changes.

 

Is the builder suitably qualified and experienced?
At the most basic level the builder that constructs your new house needs to be fully licensed and have the appropriate insurance. In addition, the builder should have experience in the type of construction that your home will be. You should also make sure that your builder is a good communicator and meet them to determine if they will be a good fit for you.

You should ask them for reference of recent clients who have had their house built through the builder. You could also visit any display homes if they have any.  You should also confirm the quality of the materials, fittings and fixtures that the builder will use and ensure that this is contained in the build contract.

 

Inclusions and exclusions

When you are getting and comparing quotes from builders you should not just focus on the price but also on the inclusions and exclusions. One builder may be significantly cheaper because the have excluded things that you may need and are costly. You should also investigate what changes and additions that you may want will cost.

 

Timeline

Everyone wants their new home now, or at least as soon as possible. It is important that you know the timeline of the construction include the deadlines of each of the major stages. As some builders take on more than they can deliver in a timely fashion it can be wise to have a clause in the build contract that penalizes any delays in completion and hand over of the home.

If you are satisfied with the answers to your questions you are ready to engage a builder for your new home. There are some great house and land packages available and you can be very happy if you engage a good builder like Localbuilders.net.au see here.

Tradespeople have a saying measure twice and cut once. When buying a home and land this translates to plan well and double check everything before signing the build contract.

 

Investing in a house and land package can be a good option in some cases. But you need to understand the pros and cons.

 

 

Investing in property: house and land packages VS pre-existing properties

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This is a quite controversial topic with people on both sides arguing that they would not invest in anything else. There is little doubt that they are very different strategies. Each has its own advantages and disadvantages and each have shown by different people to work for them. Often it may come down to your own circumstances and objectives.


Below I have listed the pros and cons of investing in either a new house and land package or an existing home.

New properties including house and land packages

Pros:
- There can be some big cost saving when buying new (stamp duty).
- Less trouble, that is repairs and maintenance (renovations)

- No renovation costs
- Inspection costs (pest inspections or building inspections).
- Great rental yield as a percentage of the purchase price (more help with the mortgage).

- Depreciation benefits

 

Cons:

- little market data in new areas so it can be difficult to know the housing market price

- capital gains may be less in early years when there is still new housing stock available on the market.

- buying off the plan can mean that you don’t know exactly what you are getting until it is completed, well after you have bought and paid for the property.

Existing properties

Pros:

Run down properties can often be purchased at a reduced cost.
Renovations can add value to the property if you are a DIYer
Property market data is readily available.

Cons:
Hidden costs where repairs and maintenance may be needed.
Renovations can be time consuming, reduce the time that it can be rented out and can sometimes blow out in cost.

High capital requirements (many people just cannot afford to buy inner and middle ring properties)

Unaffordability can reduce further capital gains.

Conclusion

In the end it really comes down to your situation and objectives.

There are a range of options available for someone buying a new house and land package or if you like, an existing property.