Bought Land - Should I Wait on Building

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  • +10

    Move out of home at 27 and you probably wouldn’t be single.

    • +1

      Could set up a tent on the block of land when some privacy is needed.

  • That's a pretty good position to be in. If I were you, I'd sell the investment and use the money to pay off the new land & building. To be mortgage free before 30 is an amazing accomplishment.

    • +1

      Not sell, especially not in this climate, but debt recycle. Offset your PPR instead of your IP. IP is tax-deductible, PPR isn't.

    • +1

      Care to explain how he would be mortgage free if he sold the investment after the cost of building and he owns only 20% of both purchases? Still a good position though regardless

      • By miscalculating like I just did. No wonder I'm still paying mortgage..

  • +3

    Maybe worth waiting a couple months to see if the government increases the FHOG as the property market shits itself.

  • +6

    Can you be eligible for FHO if you already have an investment property?

    • hello ATO

    • +2


      • Fair enough, just had a look. Seems you can.

    • So long as you don't live in it as your primary residence then yes, you are still eligible as you have never owned a "home" as such.

  • +2

    Well if you build you now have an income producing asset unless you can rent out your land.

    So building is probably the best idea here.

    Likewise empty land losses cannot be claimed under negative gearing.

  • -2

    27yo and don't pay your folks rent?


    • +13

      Maybe his folks don't need it.

      I wouldn't charge my kids if I could afford it.

      As long as they are saving or investing their money as opposed to pissing it up the wall, then full support from me.

      I would prefer my kids get ahead of the curve financially.

      If they are financially irresponsible, I would make them pay me rent, so I can then utilise that money to invest and save on their behalf.

      There is always that honeymoon period where 18 year olds go a bit nuts.

    • +4

      Depends on the culture, it's not that unusual.

      In fact, for some, the thought of parents being paid by their children to live in their house is absurd.

  • +3

    House on land + bigger mortgage > no house on land + smaller mortgage > house on worthless land with any size mortgage.

  • I would go thru the approval process which takes some time. Once u have a DA u have options (doesnt mean u need to build straight away, but there are costs)

    Nonethess it might be a good time to build. Interest rates are low meaning during the construction process, it would be a little easier. Then u can rent out or live in (process could u take 2 or 3 years, who knows u might have a wife and family by then!)

  • If you are talking about building now, as in next week or next month I would hold off. There are far too many unknowns at the moment for me to be comfortable with such a big investment. Builder could go bust half way through among about a thousand other things that could go wrong right now.

    As braskic said you should move your offset to the land

    I don't know if building before or after paying off the land will affect FHO or any other possible concessions

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