You’ve probably seen the advertisements for house and land packages at very affordable prices. These deals are normally offered by big developers who buy up large tracts of land, add the necessary infrastructure like roads and utilities, and then release individual lots to the market as either a completed house and land package or vacant land for buyers to build on.

No matter whether you opt for the complete package or settle for vacant land, the big plus is that at some stage you’ll have a sparkling new home. But there are pros and cons to consider with both strategies.

House and land package – what you see is what you get.

House and land packages can offer a ‘turn key’ deal with all the bells and whistles including fully landscaped gardens, driveways, paths and clothes line, while interiors are painted and floor coverings like carpets and tiles are in place.

In addition, you know exactly what you’re buying. You can see whether the dining room is large enough to accommodate your furniture, and you know exactly what the bedroom windows look out onto. It takes the guesswork out of how your home will look and feel, so when you take possession of the property you can dive straight into the business of settling into your new home and exploring the neighbourhood.

Modifications can be costly.

Along with the benefits, there can be downsides to buying a completed house and land package. If you want to make significant improvements like, say, adding a backyard swimming pool, it can be expensive to accommodate major changes to a completed dwelling.

You may also have limited opportunities to customise your home to your preferences. Minor issues like changing the interior paint colour are relatively easy to sort out. However, re-tiling the bathroom to suit your taste can add to the cost of your home, and if there is a large number of items you’d like to change, it can pay to think about option number two – buying a block of land and building when you’re ready.

Buy the land. Build later.

Plenty of new estates feature vacant lots for sale, or you may come across an in-fill site in a more established suburb. Either way, buying land first with a view to building later provides the opportunity to construct a home that accurately reflects your tastes, preferences and lifestyle. This option can also provide savings on stamp duty as you’ll pay duty on the value of vacant land only, which is likely to be far less than for a completed house and land package.

On one hand, buying land first and building later provides more time to save funds for your home’s construction though if you are currently renting a home it can be a financial squeeze to juggle rent payments while also managing the repayments on a land loan.

Be aware too, master-planned estates often have design restrictions in place to help create a cohesive overall impression. It can mean you are restricted to a choice of builders and designs, and while minor modifications in key home designs may be fine, anything that’s wildly out of sync with the overall look and feel of the estate may not pass muster.

Potential stamp duty savings.

On the plus side, a number of state/territory governments offer incentives to new home builders and buyers typically in the form of stamp duty concessions.

This is also a good opportunity to discuss loan finance. A traditional mortgage may be suitable if you buy a home and land package but if you’re building a home from scratch, a loan for the land and separate construction loan is likely to be better suited to your needs. Your ME Bank Mobile Bank Manager can help here too, with expert advice on the loan finance that works best for your needs.