澳洲Australia property Cheap as chips land, suited to owner buil
I have a block of land in a small town 45 mins from Dubbo NSW that I'm looking to sell. For reasons that will become clear, it suits a DIY/owner builder type, or perhaps a removal house or prefab.
I didn't buy it as an investment. The town is a tiny town and I intended to live there. (My plans changed when my son had health problems and I needed to be near the city).
Not that it has been a bad investment - my on-paper return ten years on is 12-15 fold, making it my best on-paper investment ever. However, it isn't particularly liquid as undeveloped land. There's a lot of land there. My half-acre residential block, one street back from the main drag, is one of many.
The real problem is, the price is too low to sell through an agent. I bought it privately for $1000 - yes, $1000 - ten or eleven years ago, and it's now worth $10-15,000, depending on whether we're talking optimistic or firesale. (I'd be aiming for $13,000). Of course, selling through an agent would eat up 30-40% of that on the flat rate basis used for such low-cost properties. (One agent tried to sell me on an auction! I asked him what clearance statistics he was using to support such a recommendation. Jenman would have been proud). So I would not recommend anyone buy it unless they planned to either build on it or sit on it for another decade.
The housing profile there doesn't really lend itself to building a glossy project home. The figures might work out if you're in the trade, but the standard house there is a 3 bedroom weatherboard going for 150,000-170,000. I don't think you'd have any trouble getting 170K for a 3br removal home done up nicely, although you might have it on the market for quite a few months. (Houses are more liquid than land there, but it is still a small town. Modestly tidy houses seem to sell in 3-6 months while tired houses sit forever). That's why I say it's suited to a DIYer, tradie, or a removal home as opposed to someone contracting everything out. There's a nice profit possible there in a relatively short time, but you'd have to be able to front or x-coll the money - lending would be an issue for such a small town.
There may be a rental market there - there is an agricultural TAFE I believe, as well as a K-10 school and a public pool - but I don't think there's enough history there to get any statistically reliable data. I wouldn't have that as my main strategy.
I'm not desparate for the money so I'm not going to put it to an agent nor accept a firesale price, but I do have other things I could do with the cash. I am happy to keep sitting on it if I don't get any takers though.
Please PM me if you are interested.
FYI, having recently got a quote for a weatherboard house build, you can get them for < $100k, inclusive of most stuff but not carpets, window dressings and landscaping. That figure might help your case.
Next time you're up that way put a sign on the block. Maybe an ad in the local newsletter. You really want to find a local who has a spare house on a farm and thinks to move it to town to get some rent.
I knew someone once who had a block in a small village. He advertised it in the Tele and got a buyer.
These small villages often suit someone as owner/occupier because they can move from the city and get an affordable house.
Your rates must be cheap if after several years you're still makiing a profit. So I would assume it is not sewered and possibly doesn't have town water.
It's a nice town but I think on today's prices better investments can be made elsewhere.
i reckon it'd be cool if regional is your thing.
block for $13k + stamps, and a single module, prestressed conc slab, simple 2bed transportable for $85k delivered and installed....$100k all up.... valuation at $175k average means you have 60% LVR and rent would be $150pw for something new in Peak Hill/Wellington.
$100k owing with $150pw rent = 7.8% yield - after depreciation of about $2500pa, (minus rates of say $750 and water of maybe $450 - total +$1300) it would be more like a 9.1% yield.
even my art portfolio - and i got a GOOD RATE - rents for 7.5%pa.
how is this NOT a good investment....?
I would think because the town in question is probably about 90 minutes west of wellington (ie 45 minutes west of Dubbo) and the same distance from Peak Hill. If it's where I think and the Government closes/downsizes the Ag Research station that may have an effect on the rental market.
Of course if the town isn't Trangie then my assumptions will be incorrect. But after several hundred thousand k's driving in western NSW Trangie is the only town that leaps out as being 45 minutes from Dubbo
Is this block a corner block that I am thinking of?