House and land: what you need to know

If you’re thinking about house and land packages, read below for a few tips to increase your return on investment in the years to come.

You might experience an uplift in the price of your home if major public transport or road infrastructure is upgraded or extended in your area.  This is beneficial for both investors and owner occupiers as not only does property value increase, but the amount a premises can be rented out for may also rise. Although tenants are rarely be excited to pay higher rents, if more infrastructure leads to a better quality of life, like a reduced commute time, they too are impacted by the accessibility that infrastructure upgrades can provide.

So if you’re considering getting into Australia’s housing market, targeting a property that has transport or future transport links can prove invaluable. Be wary of promises from developers about facilities that seem to be vague and set in the non-defined future. Even with good intentions, infrastructure projects can fall through or experience funding delays, meaning a potential value increase in your property will stall. Investigating through local councils and major federal government projects with committed funding is a better approach to take.

Another aspect of the house and land market to be mindful of oversupply. Although many capitals around Australia are reported as being in the midst of a housing undersupply, this generalised statement may not lead to a good, individual investment choice on your behalf. House and land can be volatile in that the higher quality projects in the most desirable areas can increase in value exponentially as soon as a precinct is finished. In some cases, speculative buyers will on sell at this stage and make tidy profits. Remember, however, to factor in stamp duty and any capital gains that you may need to pay to make the most of this strategy. Oversupply in this instance is not a factor.

In other cases, when large parcels of land become available to a variety of developers over a period of time, you can run the risk of experiencing no, or worse, negative growth in terms of your house’s value. In some instances this is because some people will always seek out the newest and latest properties to sink their money into, while your still very new home at 5 years, is comparably dated. The Gold Coast in QLD has experienced this is some neighbourhoods. The long term investor should be less concerned with this aspect, however, as long as by the time that they wish to sell the number of buyers for their area still exceeds availability. Therefore, timing becomes a crucial factor when facing potential oversupply issues.

Finally, take the time to explore your options with a few house and land providers. Many will offer several sites across a region so visit them all to get a sense of their quality of build. Also inspect homes and contracts through other companies so you can make the most informed choice for your purchase.