What are people's thoughts in investing in land, I'm looking to purchase a small block in eildon, near the lake.
What are you going to do with it YI?
Land doesn't bring you an income. You can't (easilly) tenant land.
Are you planning to buy it then build?
Are you going to hold it and hope it appreciates?
Can you afford the repayments or the idle funds?
more info please
The plan would be to build on in it in the future. I know land doesnt bring an income, would actually cost money with rates etc. However I think appreciation would be great. As with the supposed trend of baby boomers moving to rural and beach towns.
My plan at the moment is build for the future.
It's a noble plan
The only thing I would say is you have to figure out how the inability to use that serviceability or funding will affect you in the future, as compared to the expected capital growth of the land.
You may be able to agist it to someone, although that area is probably not sought after for spare land... But maybe some local truckie, or horse owner would be interested in using the land, if only in exchange for maintaining the vegetation thereon.
Is it waterside? Is there good fishing? Does it have services (Electricity, water, sewerage, possibly phone)?
If so, it could make some money as a holiday unit to fishermen. That would at least bring some income- and contribute substantially to holding costs.
Without that, it's speculation- just a big gamble.
It could pay off (as it did for my grandfather, who retired quite comfortably). But it could bomb.
I'm not so much of a gambler (now). It's not something I would do.
But, if it does work out OK, and you don't go in for it, you may miss out on a great big fat bonus.
close to water, shops,electricity and telephone connected.
I dont know if its good fishing...I will have to ask locals about that one.
Will continuing doing my research on it.
Just a few quick questions. How long do you plan on holding it before you build? If its a decent amount of time, I think the money could be put to better use in a property where you get capital growth AND yield , rather than just the hope of capital growth.
Also, as its a rural area, are there numerous similar blocks nearby?
Just a few thoughts,
At this stage around 5 years before I build, is the very basic idea.
At stage I cant really afford too much, so thats is why i'm looking at small blocks of land.
I'm going to have a look to see if they are many vacant blocks around.
My brother in law has a place on a lake in NSW. It's a trout fishing place. He's put in a transportable into a caravan park.
It's not an investment for him- it's a lifestyle.
Fishing opportunities etc are perhaps just a "red herring". In the end, it is still just speculation- unless you can reasonably expect good rent from a fishing (or similar) holiday unit. I'd actually suspect not.
The brother in law has done quite well out of property development. The fishing place is not even an investment for the future for him- it is completely lifestyle only.
Regardless of what happens, I'm enjoying researching for my next ip so far anway
... And any trips up there may well be tax deductible (subject to ATO guidelines of course)
Sounds like your thought process has moved on from the block of land, but just a thought that I had.
If you hold the block for say 5 years I read once (stand to be corrected on this) that the holding costs of the land if not generating income are not tax deductible. Ie rates interest, improvements travelling etc.
It was some time ago when I did read this and I may very well be wrong (but I don’t think so).
Also If this being the case then your capital gains that you are banking on will have to be higher to compensate you for the holding costs and lost opportunity of using the money elsewhere.
Mr Ed - your completely correct - no tax deduction is allowable as it is not generating an income.
I am a newbie but I thought that you must build on vacant land within 12 months of purchase to claim expenses as tax deductions; otherwise you can't.
Is that right?
I think if a property is available to be rented (produce income) the expenses in gaining that income will be tax deductible. As a vacant lot is hard (impossible) to rent, expenses are not tax deductible.
As far as building goes, when the property is available to rent, then expenses will be deductible.
(waiting to be corrected
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