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This is a Dual House Build in one of the most sought-after subdivisions in Christchurch; Prebbleton Mews, where the average house price is 1.16m. This subdivision has only allowed 6 subdivided sites, and we have 3 of them, so sites like this are extremely rare and valuable. We have chosen Lot 5 for this project as it is the corner section and the titles are due out in October 2024. If you have the money the total project cost is $1.25 million with a with a potential $400k profit margin if the two houses were built and sold. But if not, our team has found a way to build the project as a partnership, one house each for $625,000.
Each house will cost $625,000 which includes land and subdivision costs. Build time – 9 Months from Title date
On completion your house will have cost $625,000 including land to build. Houses like this in the region have a valuation of between $790,000 to $825,000 each. That is a potential profit/equity gain of $115,000 to $200,000 creating a return on investment if sold of between 26.4% to 32% depending on final sale price. If you are looking to “build and sell” I offer a service where I sell it for you on your behalf, so you don’t have to pay real estate fees. I offer this service to help my clients maximise their profits. By maximising your profits my hope is that you do repeat the build on completion. If you are looking to “build and hold” I can connect you to a reputable agency to manage your tenants of your behalf.
With the Brightline test reduced to reduce to 2 years and interest rates likely to reduce this is an amazing project to be involved with. If you decide to build and sell the profits are substantial, but if “build to keep” is your goal, they will return a very good rental yield. Each property will rent for between $620 and $650 per week creating a rental yield of between 5.1% to 5.4%.
Government rules and regulations will have an impact on property portfolios. For example, debt-to-income ratios (DTIs) are about to come in (July 2024). These new rules will make it easier to invest in New Builds rather than existing properties. Loan to value ratios (LVRs) say investors need 35% deposit to buy an existing property. But New Builds are exempt – you only need a 20% deposit. So with New Builds you can buy more properties and get a similar capital growth rate. For investors, new builds will make a much better investment.
One big question many investors have is: “How many properties can I buy?” The Reserve Bank has put out some estimates. Lets say you own one investment property today. If the DTIs didn’t come in, the Reserve Bank thinks you can buy another 5 investment properties over the next 10 years. With the new DTI rules that number goes down to 3 more! So, these rules will slow some investors down. But not all investors will hurt the same. New Builds are exempt. So if you buy a New Build you get to stick with the old rules. That means if you want to build a property portfolio faster, New Builds are the way to go. The Reserve Bank’s estimates suggest you could grow a property portfolio almost twice as fast with New Builds
Build Fordge Holdings, a subdivision of Investment Build New Zealand, specializes in premier real estate investments. Our mission is to provide high-quality, profitable investment opportunities in the housing market. With a focus on properties that offer strong rental yields and growth potential, we assist clients in building robust investment portfolios. Our experienced team is dedicated to guiding you through every step of the investment process, from property selection to financing solutions.