Property investment
What to consider when purchasing a house and land package for investment
Six practical areas to review before committing to a house and land package as an investment.
Originally published 27 June 2023
A house and land package can be an appealing way to add a new property to an investment portfolio. Like any property decision, it deserves careful research and a clear understanding of the numbers before you commit.
1. Location
Look beyond the display home. Consider access to transport, schools, shops, employment and future infrastructure. Local rental demand, vacancy rates and comparable rents can help you understand how the area is performing today.
2. Builder and developer
Research the builder and developer, including their experience, completed projects, contract terms and current capacity. Independent legal and building advice can help you understand the contract and construction risks.
3. Rental return and long-term potential
Compare realistic rent estimates with the purchase price, loan repayments and ongoing costs. Capital growth is never guaranteed, so test whether the investment still works if growth or rent is lower than expected.
4. Design and inclusions
Review the floorplan, orientation, finishes and inclusions with the needs of likely tenants in mind. Confirm what is included in the advertised price and budget for anything that is not.
5. Timing and finance
Land settlement and construction lending can involve several stages. Allow for valuation requirements, progress payments, possible delays and the period before rent begins. Your finance should be assessed against the complete project cost—not only the advertised package price.
6. Ongoing costs
Include rates, insurance, property management, maintenance, owners corporation costs where relevant, and a buffer for vacancies or unexpected expenses. Tax outcomes depend on individual circumstances and should be discussed with a qualified tax adviser.
Bringing the decision together
A suitable house and land investment balances the property, the location and a finance structure you can sustain. Cameron Capital can help you understand the lending side and coordinate it with the timing of the purchase and build.
This article provides general information only and does not take into account your objectives, financial situation or needs. Lending, scheme and property eligibility criteria apply and may change. Consider obtaining advice appropriate to your circumstances.