For many homebuyers, House and Land packages are one of the most cost-effective ways to get onto the property ladder. There can also be big draw cards for prospective investors too, including financial savings, depreciation, and tax benefits. House and Land opportunities are most often located in high-growth suburbs (like Riverfield Clyde) and have a huge potential for capital growth… if your timing is right.
Here are 9 reasons why building to rent might be worth exploring if you’re in the market as an investor.
1. Take advantage of financial savings
For savvy investors, there are plenty of savings to be enjoyed by buying a fixed-price House and Land package. This set price arrangement can really help take the stress out of buying an investment property too, particularly for first-time investors.
On top of this, there are considerable potential stamp duty savings when you buy House and Land. Remember, purchasing an established home means paying stamp duty on the house and the land. But, buying a House and Land package means you’re only paying stamp duty on the value of the land component since your home has yet to be built. This can save buyers thousands of dollars!
2. Claim costs on depreciation
Depreciation claims can be one of the biggest benefits of buying a House and Land package as an investment.
For new homes, tax deductions can be claimed for depreciable assets including the cost of constructing the building as well as fixtures and fittings, appliances, carpets and blinds. To save yourself time and money at the end of financial year, it is recommended to engage an expert that can draw up a depreciation schedule for all the above.
3. Even more tax benefits
On top of depreciation, there are a few other tax benefits that can apply to the upkeep and maintenance of investment properties. Think council rates, advertising for tenants, water, cleaning, repairs, gardening, lawn mowing and property agent fees. Be sure to check in with your accountant for a full list of potential claims.
4. Building in a high growth suburb
When it comes to House and Land packages, you’ll most often find these in new estates, located in high growth suburban areas. Getting in early and buying in such a community means you could be ahead of the pack, and potentially in line for greater capital growth in the long run.
When choosing a new estate for your investment, be sure to consider the amenities included in the masterplan and any existing or new infrastructure planned for the area before diving in to make a purchase.
Take Riverfield for example. Guided by Brown Property Group’s vision, our masterplanned community has been designed to deliver the lifestyle amenity and conveniences that residents desire. Each of our four incredible precincts is surrounded by parks, sports fields, nature reserves and schools, with House and Land opportunities to suit everyone. And since Riverfield is ideally positioned in Melbourne’s flourishing southeast corridor, there’s even more exciting development on the horizon, making it an attractive option for owner-occupiers and investors alike!
5. What tenants are looking for
Who doesn’t love the allure of something shiny and new?
Tenants are just like the rest of us. At the end of the day, living somewhere brand new will almost certainly trump a rental that is a bit tired and rundown or needs maintenance work.
6. Good rental yield potential
One of the most important factors to consider when investing in property is rental demand.
As a landlord, the goal is to attract high-quality tenants who will stay long-term. Since the pandemic, the demand for House and Land packages is on the rise, as people shift away from high density living. As a result, many people are looking to live in a larger brand-new home, with the added lifestyle benefits a new community can provide.
Also, in terms of bang for your buck, historically, house prices grow faster than apartments. In Clyde, the median property price for a house is currently $672,250 with annual capital growth of 13.94%. If you’re thinking about buying an investment property, consider that rental yields for houses are currently 3.33% with an average median rent of $450 weekly. Houses have seen 4.22% growth in the past quarter, and 13.94% in the past 12 months.
7. Low maintenance
With a brand-new home comes far less maintenance – a win for property investors and tenants alike!
Your new House and Land package is less likely to need any renovation or maintenance work for years, and often the building, fixtures and fittings are covered by a warranty, meaning significantly lower running costs and upkeep.
8. Builder warranty
On the topic of warranties, the construction of your home should be covered by a builder’s warranty if something goes wrong.
If the warranty is valid and you find a defect after settlement, this is likely to cover repairs so you’re not out of pocket. This will give you some peace of mind compared to purchasing an established home where it’s usually a case of buyer beware!
9. Create the perfect investment property or future home
Putting yourself in a prospective tenant’s shoes and considering their requirements or what might attract them to your property could pay dividends when it comes to maximising returns and retaining good tenants.
Perhaps opt for a floorplan that will make the property more appealing to renters, such as an extra bedroom or multi-purpose rooms that could cater for different living set-ups.
Keep in mind also, that with a House and Land package, you have a higher degree of flexibility to build your dream home, which you might choose to live in yourself later on. Choosing the right developer and builder means you can select the most suitable block for you in terms of orientation and size, pick a design from a range of package options, and even customise it to suit your needs and budget.
With renters looking for security in a post-pandemic market and investors looking for returns, a House and Land package could be the perfect choice to grow your property portfolio! To learn more about current opportunities at Riverfield get in touch with our expert team on 1800 001 895 or explore available House and Land packages in our new Riverfield Square precinct.