Getting the house of your dreams can seem like an almost impossible task for first-time home buyers. The unprecedented rise in property prices, scarcity of urban land supply, and Australia’s slow income growth can make any person believe they will never be able to afford a new home for their family.
Furthermore, most new home buyers find the process of building a new home overwhelming: Setting a budget, selecting a plot of land, locating the right builder, designing a home (and all the decisions that entail), and securing financing… there is a lot to do as a home buyer, and you want to do it right!
But it’s not all bad news; house and land packages are not only a desirable and affordable option for many buyers looking to enter the property market, but they may also provide a great solution to some of the most frustrating and time-consuming aspects of building a new home!
Reasons to choose House and Land Packages for First Home Buyers
If you’re looking for a new home for your family, here are seven reasons why house and land packages offer better value for first-time buyers than buying and building a house yourself:
1 – INITIAL COSTS & AFFORDABILITY
The price of house and land packages are usually fairly upfront, which is ideal for those with pre-approved financing and a tight budget. Typically price includes the work of professional designers and architects involved in ensuring your home is of high quality and that the property fits perfectly on the lot according to block orientation- this eliminates any consultancy fees.
House and land packages are typically significantly less expensive than ready-to-move properties, and you will only have to pay stamp duty on the land’s value because the house has yet to be built. This can result in significant savings for you!
2 – QUICKER AND EASIER PROCESS
House and land packages are one of the most convenient ways to buy a new home. House and land packages simplify the entire building process for you by bundling several of the processes involved, making it easier and less stressful.
Finding a builder who can provide you with a variety of home designs that will fit perfectly within a plot of land will save you a lot of time! Once you’ve decided on the ideal floorplan for your family, finance, council’s approval, and construction will be relatively quick, allowing you to move into your new home on time!
3 – A HOME DESIGN THAT MEETS YOUR FAMILY’S NEEDS
With house and land packages, you can not only choose from a variety of home designs, but you can also customise several aspects of your home to ensure it meets the needs and lifestyle of your family. This flexibility and input to personalise every space of your home to make it your own adds far more joy to the process of owning your first home than purchasing an existing house would.
4 – LESS COMPLICATION
If you work with the same team to acquire your land and build your home, you will be presented with a solution in which the best lot for your lifestyle is selected, along with a house designed to work best for the chosen lot of land. Working with an expert on a holistic solution will reduce stress and provide you with much-needed support.
Securing financing for a house and land package will be simpler and less time-consuming because you will apply for a single loan rather than two (a loan on the land and a loan on the house). With a combined loan, you can get the best rates and choose a bank that understands progress payments.
Banks can factor in the first-time home buyer grant into your loan calculations, making it easier than chasing down the grant later on.
5 – PEACE OF MIND
When you buy a house and land package, you know exactly how much it will cost you upfront, and the builder has included everything you need to get started on-site. You will have relatively fixed costs and will be able to budget accordingly.
If you undertake a DIY build (especially as a first-timer), you will face an uphill and often stressful battle, full of unexpected surprises, such as selections and items not included in the house’s base price. A house and land package provides you with certainty, convenience, and peace of mind both before and during the construction process.
Don’t forget to ask your builder these questions.
6 – FINANCE
Selecting a home and land deal package also simplifies project financing. When you buy a plot of land and then hire a builder, your funding will be divided into two parts: one for the land and another for negotiating with the builder. In the case of a home and land, the financing will be streamlined into a single loan and one process. This is because the mortgage on the land and the construction loan is typically combined, and repayments are based on construction milestones, so you only pay the full amount once your new home is completed!
BENEFITS OF BUYING A HOME AND LAND PACKAGES
Select your own design for your investment property
A home and land deal package can provide you with the option of constructing an ideal investment property that fits within your investment budget and has the style and layout that you desire in a home.
Making an informed decision about your next property purchase is critical to maximising your investment. By selecting the right home design for your property, you gain control over how you want your new home to look and one that you will be pleased with.
This also means that you’ll have a high-quality, newly built property to attract potential tenants looking for the best block for them and their families.
As a result, it’s critical to consider home and land deals that will meet not only your needs but also the needs of tenants you’d like to attract to your property.
New homes attract potential tenants
In comparison to an existing residential property, a newer property with modern conveniences is extremely appealing to new tenants.
Because it is a new home, building a new home for new tenants ensures that you will not have many maintenance issues for a while. This gives your tenants privacy because you won’t be dropping by to fix things around the house every now and then.
As a landlord, you should keep in mind that having better tenants who want to stay at your property is a long-term advantage. This means that your tenants are happy to stay at your property, which means you’ll be able to collect rent payments on a consistent basis as long as you have good tenants who stick around.
Even if they haven’t reached their capital growth potential when compared to established properties, new homes allow you to charge higher rents and accumulate higher returns on your investment.
Depreciation and tax advantages
In terms of investment tax breaks, home and land plot is the best option. Tax deductions can be claimed for depreciable assets such as fixtures and fittings in a new home, as well as the building’s construction cost.
In addition to deductions and other payments, you can claim the maximum depreciation allowance when filing your tax returns because newer homes depreciate much faster than established homes.
For example, if you build a $250,000 property with $30,000 in fixtures, you can claim up to $16,000 in interest, rates, and rental management.
Stamp duty savings when you build a home and land plot
The construction and land components of a new home are considered separate contracts. In the case of a home and a plot, you only have to pay stamp duty on the land component.
Because the house hasn’t been built yet, you only have to pay for the land, which can save you a lot of money in the long run.
For a $450,000 house, you will save approximately $8,000 in stamp duty, which is a significant saving when compared to the total upfront costs that you will have to consider.
It is critical to understand the savings available when investing in real estate. Metro Homes team can walk you through the entire process, so you know you’re making the best decision for you.
Consider how much money you can save by investing in home and land deals with lower stamp duty.
It requires little to no maintenance
When compared to an existing property, a new property will require less maintenance and will incur lower repair costs. A new home will come with a builder’s guarantee, which ensures that the structure, fixtures, and fittings will be covered for the number of years specified in the contract you will sign before your house is built.
Maintenance and upkeep are the most expensive aspects of owning an investment property. One advantage of building a new home is that you won’t have to constantly maintain it to repair the damage.
This is due to higher quality materials and better construction techniques used by reputable builders to ensure your home is strong and easy to maintain for years to come.
Simple Processes
The most significant advantage of purchasing house and land bundles for investors is that it simplifies the process of creating a new bespoke home. This is due to the fact that you do not need to look for a plot of land first and then find a suitable contractor. Instead, check both of these boxes simultaneously, and you’ll have someone to talk to throughout the procedure. It’s worth noting that you’ll still have two contracts: one for construction and one for land.
Savings on expenses
You can save a lot of money by purchasing a house and land package. If work on your new home hasn’t begun yet, you only have to pay stamp duty on the land portion of the transaction. Tenants prefer modern and energy-efficient homes as an investment because they significantly reduce their living costs. You may be able to deduct the entire amount of your investment.
Builders with Construction Experience
Another significant benefit of house and land packages is that the builder will be familiar with the area of land you will be purchasing. This means they’ll be able to put their knowledge to good use when it comes to creating the best design plans for the property you’re purchasing. If your property is on a slope or has an unusual shape, a custom home builder can create designs to accommodate these characteristics.
Checklist for Real Estate Investment
It is essential to consider the following factors before signing the contract:
- Infrastructure in the vicinity
- Excellent location
- Opportunities for employment
- Medical facilities and schools
- Lower initial costs
- The maximum profit on your investment
When it comes to investing in a house and land package, carefully considering each factor will help you make the best decision for you. These elements will ensure that your property investment will be profitable for many years to come.
Metro Homes has a qualified and experienced team dedicated to assisting you in making sound real estate and home-building decisions.
Build your new house and land package in NSW with Metro Homes
If you want to buy a new home and land package in Sydney or any other region but don’t know where to start, our team at Metro Homes can assist you. We take pride in providing incredibly efficient services to first-time investors through our house and land packages.
Our team is made up of industry professionals with years of experience to help you make an informed decision when building your new home.
We’ll be with you every step of the way, from the moment you sign the contract to the moment you receive the keys to your newly constructed dream home.
Visit one of our display homes to see the quality of our house and land packages. Our staff will gladly assist you. Alternatively, you can contact us via our website or by phone at 1300 757 014 so that we can assist you with your property investment goals.
