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Buying land with old dwelling or build a new house in future

  • 27-03-2018 12:56am
    #1
    DTMeath
    Registered Users, Registered Users 2 Posts: 7 ✭


    Hi everyone,
    I'm in two minds what to do! This evening I've got offered 4.5 acres of land that includes a small old dwelling and an outshed for a very very very good price!
    I'm a "young trained farmer" but have been a paye worker up until recently where I've become a sole trader instead starting work where I'll be getting guaranteed work for the forseeable future. The o/h has a pensionable public service job!
    We were planning to build a new house on a gifted 1 acre site in 2-3 years. But this offer tonight has put the cat amongst pigeons!
    We would need to take a loan out for the land, we could use our funds saved for the 10% contingency plan for the self build as a deposit for the loan for the land and old dwelling!
    Would we be mad to buy this land and old dwelling or would we be better off to continue saving for the next 2 years until I have 2 years accounts to show banks for mortgages?
    Off the top of my head as I'm a young trained farmer I'd have to pay minimal stamp duty for the "non residential lands" if we bought the land and old dwelling!
    If we bought the land we could do the house up bit by bit to make it livable out of our own money to live in for a few years until we could get a mortgage and knock the old house to build a new house!?
    Any help or advice would be greatly appreciated!


Comments

  • #2
    mike_2009
    Registered Users, Registered Users 2 Posts: 544 ✭✭✭mike_2009


    Talk to the Bank about financing based on the fact you're now a sole trader and that could count against the max mortgage you're hoping for. This could put a brake on things entirely. If serious get an independent survey done on the old property. I think you'll need planning to knock and rebuild. More costs!

    Other Factors:
    Building Costs (labor & materials) will continue to go up over next 2-3 years.
    Regulations will tighten after 2020 with NZEB which may impact cost of building new dwellings (albeit more comfortable and cheaper to run).

    Going for a green field build in 2-3 years sound cleaner and gives you time to plan and line up your finances. The other options while attractive will involve a lot more work and be more expensive - demolition, pay for land vs gift, condition of old building, inadequate septic system, is water system good etc? More of a risk. Are you happier with the location of one site over the other when all is said & done?

    Best of luck, interesting times ahead for both of you.


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