So I'm Thinking of Buying Land with No Good Reason

sparkanum on 10/07/2016 - 01:53
Last edited 10/07/2016 - 10:46 by 1 other user

Call this ridiculous, but my wife and I have suddenly gotten interested in buying land, but without a good reason to do so.

My question for the Ozbargain community is: what sort of annoyances should we anticipate in buying uninhabited land? Or surprising benefits?

A bit of context: we live in Sydney, we rent, and have no interest in buying a house/apartment - maybe not ever. We're still saving appropriately for retirement, but just doing it without property involved.

The kind of land we're talking about here is the kind of land that's dirt cheap (e.g. maybe as low as $10k), and located in random parts of NSW. Maybe housing permissible, maybe not. The kind that's almost certainly a long drive from where we live, but as close as we can reasonably get.

It's hard to explain why we might want to buy land, but a big part of it is just the mild amusement of being able to say that we're "landowners". We also have fanciful notions of camping on it, in spite of the fact we're not camping people, and maybe have a very inconveniently located and poorly maintained vegetable garden on it. Plus my very irrational feeling that a tangible asset would be useful to have in our portfolio if civilisation suddenly collapsed around us for whatever reason.

I'm basically looking to know what should we be prepared for if we were stupid enough to go ahead with this. I know rates are one ongoing cost, but are there other annoyances / costs of owning uninhabited land we should know about? And is there any sort of income generating activity that random land could be used for?

Interested in any advice y'all might have.

Financial

Comments

  • altomic on 10/07/2016 - 02:26
    +1

    There will be council rates.

    Depends on the size of the land. You may be able to make a little cash by renting for agistment (someone else runs cattle on it).

    There will be boundary fences to consider as well

    • sparkanum on 10/07/2016 - 09:25

      What happens if I don't maintain boundary fences? Does it just mean the likelihood of getting paid for agistment decreases, or are there legal requirements or boundary creep issues?

  • toristo on 10/07/2016 - 11:04
    +3

    I'd want to think about the long term outcome you want from this a little more. If you are land banking, expecting capital gains, sure. I wouldn't buy cheap land just because its cheap with the intention of paying council rates on it and no plan for what you'd do. Most cheap land is cheap for a reason, and it's not going to just appreciate because time has elapsed. Country areas are not growing quite like cities, so you can't expect even 3% consistent growth - a drought would slash prices in an area considerably for example. You'd be better off buying another asset - even if it was shares in a property trust.

    • sparkanum on 10/07/2016 - 11:19

      That's good advice, but we're not really doing this as a serious investment.

      I suppose the long-term outcome we're looking for is "land onwership", almost for the sake of land ownership. We'd be paying a price for it with the expectation that if it became worthless overnight we'd not be too fussed.

      I'll check into rates for the areas we're looking at, though, and just make sure it doesn't cost an unreasonable amount to maintain for that purpose. Thanks!

  • chumlee on 10/07/2016 - 11:33

    Is there land available for $10K?

    • sparkanum on 10/07/2016 - 11:43

      Apparently yes! Even for half that! Finding that out actually took this from a "Yeah right" to an actual possibility.

      For the amount of money I'd lose the second after buying a car I don't need, I could have land!

  • Priceless Class on 10/07/2016 - 12:09

    Once you buy it, you could always put it back on the market for twice the price and hope some foo…. potential landowner might see it as a deal and snap it up, making a few grand in the process.. But really. I don't understand why you would want to do this?

    Does leasing it for agistment allow you to claim the ownership costs of the property for tax purposes maybe? You'd have to investigate.

    • sparkanum on 10/07/2016 - 16:08

      I was going to have a look at whether the rates are tax deductible, so will look into agistment as well. Thanks for the idea.

      We probably wouldn't put it straight back on the market, as we actually want to just keep it forever. You know, to maintain the "foo… landowner" status.

  • Savas on 10/07/2016 - 12:14
    +1

    If you want to make money spend more than 10K. That would get you shitty worthless rocky soil which you can't grow anything if society was to collapse. It would also be in the middle of nowhere so the value of it would never go up. Also no one would want to live there because there would be no internet, power or phone. Much better to spend 100K to get good soil, services, location, near coast etc. Eg. Bega, Armidale, Braidwood

    • sparkanum on 10/07/2016 - 16:02

      Again, this isn't an investment. Making money isn't the goal for this particular venture. I know it's ridiculous, hence my original post outlining the vague reasons why we're at this post.

      Try not to worry about why we're doing it. Start with "they are doing it", shake your head, and work forwards.

      Also, just to picknicky, it's not "worthless" even if it is rocky and has no interwebs or whatever. Because I've ascribed worth to it, and land likely is regularly traded for monies. Possibly to other idiots like me, but traded for monies nonetheless.

  • kywst on 10/07/2016 - 12:37
    +2

    If society collapsed then wouldn't your "ownership" be moot as society is what recognised the ownership in the first place?

    • sparkanum on 10/07/2016 - 15:56
      +1

      Yeah, that's where the "irrational" stuff came into the description. I get it won't work, but it feels good to say it might.

      • kywst on 10/07/2016 - 15:58
        +1

        Buy a yacht and become a pirate! Arrrrghhhh!

        • sparkanum on 10/07/2016 - 16:21
          +1

          This chair be high, says I!

          But alas, no, the wife gets seasick.

    • leiiv on 15/07/2016 - 16:51
      +1

      Maybe he meant "financial system" instead of "society"?

  • muncan on 10/07/2016 - 12:56

    Why not buy 10,000 x $1 blocks?

    • [Deactivated] on 10/07/2016 - 16:01

      10000 x land rates and legal fees. Do you work in realestate by chance?

      • muncan on 10/07/2016 - 16:17

        I do enjoy gardening on a sunny Sunday afternoon.

    • sparkanum on 10/07/2016 - 16:13

      Hmmm. Tell me more about these 10k $1 blocks…

      • muncan on 10/07/2016 - 17:06

        I heard you can pay using iTunes gift cards, so stock up next time there's a sale!

  • [Deactivated] on 10/07/2016 - 16:00
    +1

    From memory, Rates for undeveloped land is much lower than even having just a shed. Say %500 p/a for undeveloped block in some areas.

    As altomic mentioned the idea of renting for agistment, in the past Bunnings might use part of your land to plant trees. Fully managed by Bunnings I remember my brother-in-law saying it would cover the rates until the 30 years when they harvested the trees. No idea if it is still available.

    Another issue is maintenance of firebreaks every year if over 2 hectares I think.

    Seriously it seems just a task for no purpose, unless you do it for profit. Maybe invest in bluechip shares, you'll be helping the country and yourself when you're older.

    • sparkanum on 10/07/2016 - 16:19

      That's super interesting… I had no idea burnings did stuff like that. Might have a look just for interest.

      I had thought there must be something for fire protection, but couldn't see it written anywhere for the areas I was looking at. I'll have another look now about the firebreak stuff.

      Cheers for the tips!

      Re: blue chips, we've got all that sorted. "A task for no purpose" is actually a really good description for what we're trying to do here.

  • retiredfeline on 10/07/2016 - 16:15
    +1

    If you have Internet at home you're already a lanowner. Just say it with a straight face. :)

  • gooddealmate on 10/07/2016 - 16:39

    I can sell you 1 square hectare on the moon and Mars for around $9000 if you like.

    Multiple options in case society collapses and its $1000 cheaper than buying locally! 😀

    • sparkanum on 10/07/2016 - 16:50

      Are they zoned for residential development? Sealed roads? What's the access like?

  • LoserScott on 10/07/2016 - 16:50
    -1

    Your a looney, stop watching: the castle and doomsday preppers and get a bloody job, or go further towards nt, those crocodiles can solve your problem.

    • sparkanum on 10/07/2016 - 16:52

      Why has everyone latched on to the doomsday scenario? That was the jokiest part of my rationale.

  • [Deactivated] on 10/07/2016 - 19:56
    +1

    An unrelated point, but I understood from a WA RE agent that it's possible land previously owned by a church may remain council rate free. Drive a Model T ford or other ancient car that old, and buy an old church, grow your own food and you could live on almost nothing.
    Well it is a bargain hunter website ;-)

    Added: Lots of very cheap blocks in WA, eg $5000, such as unpopular wheatbelt and mining areas. Mt Magnet sometimes has old houses for < 25000 and is an OK place to live. Realestate.com.au should list them.

  • tonyjzx on 10/07/2016 - 23:33

    I'm with the OP in many ways but I dont want it to be too far. ie. I would like say within 100-200km of Sydney so that means newcastle or something like that which means the land wont be that cheap.

    I'd again be wary of council rates and I believe there are some GST implications on buying and selling land that is not your PPOR.

    I dont even need running water or power or sewage. If your parcel of land is close enough to a country town centre you should be right.

    If you're driving up I assume you're going to buy a crappy caravan or camper for some kind of temporary living.

  • CheapskateQueen on 11/07/2016 - 22:49

    Wow what an. ..interesting concept!

    Well if you're buying a 10k land, land tax isn't going to be an issue. Lol there's stamp duty which would be bubcas and council rates. Potentially water rates if it's got a connection.

    I'm still confused why you'd do this. I mean i get your concept but i just can't personally reconcile it.

    I bought myself a piece of land last year. Does feel good saying "my land" and it's been a hard choice to decide to sell. It's actually in a beautiful spot. But my land was a little more expensive than $10k :,) and it was for investment purposes

  • [Deactivated] on 15/07/2016 - 14:37

    Dead bodies buried,
    Radioactive waste,
    Bikies growing weed on it and not paying you fair rent,

    Some of this cheap land has serious problems with flooding or dust storms etc, will never get power phone water, possibly no reasonable access to it from the road.

    Ensure you/your-lawyer do exhaustive property searches for liens, caveats, back taxes and rates, that the owner is really the owner. All other monies owing on it like fencing with council/neighbours, have the seller indemnify your against all costs prior to your purchase.

    What as owner are you responsible for, do you have to mow/clear it on a regular basis?

    But hey, if it's only $10k do it and build a youtube style mud house on it :-)))
    If I had a spare 10k I would !

  • Charleston on 18/07/2016 - 15:00
    +1

    Land! Ha! Why have land when you can have planets? Buy a solar system!

    Think of it, when society collapses you'll just be able to go start your own.

    You might not be space travelling people yet, but when you want to, you can travel all the space in your own system.

    Virtually unlimited solar power!

    Also… you can tell people you own a solar system, what's better than that?

    I've got the PERFECT one for you, it's currently 90% off which makes it… $10,000! But the price can't last, get in before someone else grabs it :D

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