Similar to the off-the-plan strategy, custom-built properties can give you the opportunity to customise the property’s build and fit-out to your specifications.
Location determines the capital growth
When looking at purchasing a house and land package, the location of the estate will determine its long-term capital growth. For example, new housing estates located close to the coast will prove more popular with future purchasers. There may be a growing importance of lifestyle living.
New estates that have a limited building time-frame will be established more quickly, and this will improve the resale value of the properties.
Check the size of the lot in square metres. This will give you a point of comparison with the prices of nearby blocks. You should also pick a block with a distinguishing feature, such as a park view. This will appeal to future purchasers.
Buy the land first
When you custom build a property, you initially purchase the land. This means that you only pay stamp duty on the cost of the land rather than the entire completed dwelling plus land. This can save you thousands of dollars.
Location is important
Be careful not to buy a house and land package on a busy road. These homes are more difficult to sell. In a new estate, a road may appear quiet because not many houses have been built. However, this may change when all of the houses on the estate have been built. It is, therefore, wise to carefully look at the master plan of the estate to check the future flow of traffic.
The shape of the block is also very important. A narrow block will limit the type of house you can build. Blocks with a steep gradient that have not been retained will incur high building costs.
Land availability can be a problem
Property investors should consider buying a house and land package in a new development surrounded by other established estates. By choosing such a location, they have a much clearer understanding of property values in the local area. They can also benefit from the land-scarcity factor once the new estate is completed.
Check reputation of developer or builder
The quality of land development is very significant in determining future capital growth rates, because of the growing importance of ‘branding’ in real estate sales. Established home purchasers want impressive entry statements and developments with lifestyle facilities such as parks and cycle paths.
Check the master plan
Check the master plan for the new housing development, which will give you an overview of the facilities planned for the estate. You should also check how much the developer plans to spend on landscaping and how much of the estate will be dedicated to open-space areas.