24 Apr Give me land, lots of land.
We are big fans of the Oracle of Omaha around here and find a few of his quotes are bandied about at various times of the year, some more often than others. With the time of year, current state of the market and present political uncertainty, this quote in particular strikes us as relevant:
“Be fearful when others are greedy and greedy when others are fearful.” – Warren Buffett
Let’s think about that for a moment. It’s EOFY and there is caution within the market and an election imminent.
Traditionally and historically this slams the brakes on for a good number of Australian industries, property is no exception.
With uncertainty around the election, we see banks less willing to lend, councils less willing to approve and speculation rife from regular Joe’s with no more insight into the future than the Jane’s sitting next to them. Good thing we have our own panel of private funders (ahem.).
We like uncertainty and the possibilities it provides.
There will be those content to ride that wave of uncertainty, secure in themselves and the decisions they have made. They understand risk and are happy to play the long game.
There will be others, however, who panic, scramble to sell and are happy to accept an offer that allays their fears. This is where the opportunity lies.
That said, we thought we’d take this moment to share our thoughts on what to look for when buying a block of land, should one of those unicorn opportunities arise. These points cover the Mum and Dad planning for their forever home, all the way through to the developer buying up multiple lots to hold on to as part of a landbanking strategy until the time is right to develop.
1. Location, Location, Location.
There is good sense in buying the best block in the best suburb that you can afford.
We suggest checking out the Australian Bureau of Statistics for information around your proposed suburb. It’s a helpful guide to the local demographic, economy and industry, education and employment etc. Particularly if you are developing to on-sell, this is a great tool to help define your target market and offering, as well as pricing your project for sale.
There isn’t much use landbanking lots for apartment development if council has strict town planning requirements for residential lots or the block is located on a significant flood plain. Do your research, take the time to speak to council and understand their appetite for your proposal and how it fits into their plan for the region.
Speak to council about any easements registered over the proposed block. You don’t want to be planning out your yard only to find there is a service easement right where the new pool was going to go.
4. Future streetscape changes
Does the government own large parcels of land near your block that could be earmarked for a new school or hospital?
Or a developer has significant landbank
holdings for a future new estate? Chances are the configuration of your street could realistically change. Traffic calming devices,
reduced speed limits or new
power poles could interfere with your development planning and future enjoyment of the developed block.
5. Room to move
Does the block give you room to move and grow? Can you add an extra bedroom, or extend the deck? Is there space for the kids and a dog to roam freely and wear themselves out?
Check for neighbour’s trees overhanging your block, and tree roots creeping through that could impact your developments foundations. It’s also a good idea to speak to council to ensure there are no restrictions on removal of trees due to heritage status.
7. Power lines
They’re ugly, let’s be frank, also inconvenient when something goes wrong and the power company rips up your turf with their trucks.
8. Shape and slope
Sloping sites are lovely things. They provide great views, lovely breezes and the justification of having a mowing service! Unfortunately they also increase the costs for development requiring extra earthworks, retaining and fill. Try to aim for a reasonably flat block, of a fairly regular shape.
9. Infill sites
With each new generation comes new trends and expectations for homes and living. Often old building are torn down to make way for new, with building material left on the block or structural foundations left in the ground. The costs of building around this debris, or digging it up for removal can impact a budget significantly. There may also be concerns about the type of waste left behind, think asbestos and lead paint.
10. Restrictions or Covenants
Buying into an established area? Check for any restrictions on your block. Restrictions could include the colour of your house paint or brickwork, specific roofing materials, even the types of plants and trees that can feature in your garden. Know what you are buying into before you sign that contract.
Is there sufficient public transport to service your area that will also take you to major business centres and community hubs without changing buses three times? Is the block on a school bus
route? Are there bike lanes to facilitate your daily commute as well as a weekend ride with the kids?
12. Community Hubs
Think supermarket, library, council swimming pool, sporting clubs and parks – all the good things that make a home a part of a community.