What is a House and Land Package?

What are house and land packages?

People ask me this question all the time because they don't understand what it means.

Take it from the perspective of a developer, like me. I would rather sell the property instead of buying a house, knocking it down, subdividing, and selling off two blocks of land. I know that by selling you a block of land, you're not sure what you can do with it or what floor plans are going to fit in that lot, so you shop around between builders.

These complications make buying a property hard, and sometimes you decide not to purchase at all.

What I do to make it easier for people is to get some plans and costs drawn up by a builder.  This will give more options, so you have an idea what's going to fit in council requirements, what's going to be the cost to build, or if it's going to suit what you're looking for.

After that, go out to a display home to look at doors, knobs, and taps to get a good feel of your future home.

From the perspective of a property developer, I know if I build a house and sell it to you, I might get more money. Although, the hassle for me is I'll have to subdivide into two, three, four, five or ten, and it'll cost me plenty of cash to build many houses.

For me, I'd rather subdivide the land, sell you the property and then you can choose your preferred builder.

Quite often, particular builders show house and land packages.

It's important to understand when you see these packages, you don't have to go with the builder.

If you talk to the builder directly, and he offers you a land package, should you go for it? He will say yes, but the issue is you're not sure what he means, and he's just trying to make a sale.

At the end of the day, he's a property developer who doesn't care what package you want as long as he makes the money from the land, because the builder gets to profit from the house.

What you need to do is work out who the owner is so you can buy the property from him.

If you choose to go with the house and land package, that's fine. If not, you can shop around yourself and get a lot more flexibility.

The benefit of a house and land package is it gives you an idea of what will fit on the block. The developer profits by selling you the property and you can sign up with a contract separate from the builder.

So when you're buying a house and land package, know it's two separate contracts; one for the developer and one for the builder.

Understand the separation, so you don't feel you're locked in with those plans, inclusions, and other various other charges.

You've got a lot of flexibility.

Another thing to point out is people talking about a property being “off the plan,” which is different from house and land packages.

"Off the plan" means you're buying the property, but paying for the house after the developers build it. You'll be signing two separate contracts; one with a property being "off the plan," and another with a completed house at the end.

It's different how financing goes, and how the developer receives the money in the end.

From a developer's perspective, that's why you see heaps of house and land packages around.

It’s best to pay for the land up front and move on to build a house with another contractor.