Untitled land vs established property. Which is actually the better investment?
The Case for Buying Untitled Land
Untitled land can look incredibly attractive.
You might secure $200,000 to $400,000 of land with only a 5% deposit, sometimes just $5,000 to $40,000.
If that land increases by $100,000 or $150,000 before settlement, the return on your initial cash can be enormous.
There are other advantages too.
➡️ You can get into new estates early and secure the best blocks
➡️ You can design the eventual house around exactly what local renters want
➡️ Your upfront capital requirement can be much lower
The Risks of Untitled Land: Sunset Clauses and Delays
But here’s why I generally prefer established property.
With untitled land, you could wait 18 months or 2 years only for the developer to invoke a sunset clause and return your deposit.
Even worse, some projects are now taking 36 months, 48 months or even 5 years before the land is ready.
Then you still need to build.
A builder might promise 6, 8 or 12 months, but I’m seeing projects take 20, 24 or even 36 months.
The Hidden Costs of Waiting to Build
During that time:
➡️ You’re collecting ZERO rent
➡️ Your borrowing capacity is tied up
➡️ Construction costs can blow out
➡️ Builders can go bust
➡️ You may need another 10% to 20% contingency
And the land itself can actually FALL in value before settlement.
We’ve seen periods of this in places like Box Hill in northwest Sydney.
Why Established Property Is Often the Better Investment
Compare that with established property.
You know exactly what you’re buying.
You can analyse mature supply and demand data.
You start collecting rent usually within 30 to 60 days.
And importantly, more of your purchase price can represent the land, rather than paying hundreds of thousands for a brand new building that depreciates.
If you have $500,000 to invest, I’d generally rather buy an established property where a greater proportion of that $500,000 represents scarce land.
Untitled Land vs Established Property: The Verdict
Untitled land has absolutely made people a lot of money, particularly during strong property booms.
But for me, established property offers less uncertainty, less stress, immediate cash flow and more reliable data.
My preference?
Established property every day of the week.
When Untitled Land Can Make Sense
The exception is someone who simply doesn’t have enough capital yet to buy a $300,000, $400,000 or $500,000 established property.
In that situation, untitled land can potentially be a way of getting your foot in the door.
Have you made more money from untitled land or established property?
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Co-Founder | The Educator & Mentor
I’m also a property investor with a $27m+ debt-free portfolio of residential & commercial property, generating over $300k+ net annual passive income.
I help people from all over Australia, by accessing a unique strategy that combines high growth high cashflow residential property, alongside highly profitable property development projects to help accelerate their passive income. I typically work with families, young over-achievers, and new Buyers Agents who want a predictable, DATA-led system to grow wealth and Passive Income.