Hedland & Newman

Instant Equity ideal for first time investors – House & land packages

October 14th, 2013 • 5 comments

This third and final installment on ideal options for first time investors looks at house and land packages.

Over the past few years, house and land packages have become increasingly popular with investors as a way to enter the property market and kick-start portfolio development.

Many providers of house and land packages will partner with mortgage brokers to offer low deposit finance options. Vendor finance (covered in Part 2) may also be available.

Often, investors will only need a deposit of ten percent to secure a H&L package.  The finance is then drawn down in stages, in line with each phase of construction. 

On a $750,000 H&L package, for example, the finance would look something like this:

  • land cost: $250,000 – deposit required of $25,000
  • build cost: $500,000 – deposit required of $50,000, following settlement of land
  • loan drawn down in stages over construction period (four to five months)

In addition to a low deposit, there are several other key advantages H&L packages can offer investors.

Instant equity.  One of the greatest advantages of an H&L package is the instant equity that can be generated, allowing the investor to purchase again very quickly.  Locking in construction and land prices through a fixed price contract means that in a rising market, any increase in the value of the property between when the contract was signed to completion and handover is to the benefit of the buyer. It is not unusual to see, following the typical five-month build time frame, that the completed property is worth an additional $100,000 over costs to construct, providing the investor with immediate funding ability to purchase another property.

Save on stamp duty. With H&L packages, stamp duty is only payable on the price of the land.  On an established house, it’s payable on the cost of the land and the house. This can represent a saving of thousands of dollars.

Increased tenant appeal. The purchase of a house and land package also benefits the investor by offering a wide range of configuration choices – ideal if they are targeting the corporate leasing sector. For example, investors can add additional ensuites to the plan of the home, which will appeal to renters and significantly boost rental returns.

Low maintenance. A new property comes complete with a builder’s warranty and the additional benefit of low maintenance costs.  Maintaining older homes can be quite expensive and they are less appealing to corporate tenants.  A new home also offers attractive tax depreciation benefits that can significantly boost the property’s return.

With leverage and multiple property purchasing the key to building a successful portfolio, House & land package options can be the ideal selection for beginner investors starting with low deposit funds.



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Wen n wea is da best area to invest in a property!!! Looking first timer.. cheers

Comment by Kimi on October 15, 2013 at 4:10 pm

Hello Ryan

We are interested in building a Modular display on Development land -Could you get a Project Sales person to follow this thru




Comment by Roger Telford on October 17, 2013 at 10:18 pm

Can you add my email to your investment opportunity mailing list?

Thank you

Kind regards

Jane Tittums

Comment by Jane Tittums on October 17, 2013 at 10:56 pm

What is the builders warranty on a new property we bought off you in 2009. We are having some major and expensive problems with our purchase.

Comment by Gwaine Robinson on October 18, 2013 at 3:57 am

Hi Ryan

would like to speak to you about Investment property,.. your stock and also our stock, we are putting

together new marketing plan that will go Australia wide and would be interested in your feedback,

send me your contact details or call me on 0423392961


Ian Flett

Comment by Ian on October 19, 2013 at 4:19 pm