Under $300k in VIC?!

hey everyone,

baically, am looking again.... for IP#1, and hopefully #2, #3 in the next 2 years

these are my conditions, can a few people give me their opinions. pretty pls...

- under $300k, max $320k
- can't be apartment, must have land component

I know its a hard request give the conditions...

My goals: to hold on to it as long as possible,

to get the most possible gain with minimal risk

/\
that being said, what I was referring to is that , im not looking for an area, that may go up or if it will its going to shoot up, and yes, I know the safer the area, the lower the gains...

so id prefer as close to the city as possible, however, getting 15-20kms of the city for $300k is near impossible, that my research has shown me, so I am not expecting inner city properties... actually prefer a house, preferebly run down so it has renovation potentital (that is if I deicde to rennovate) but not likely


any comments would be apprecaited, please throw around some ideas!!

I have a few areas to look at

box hill
frankston
epping

akumaslair said:

hey everyone,

baically, am looking again.... for IP#1, and hopefully #2, #3 in the next 2 years

these are my conditions, can a few people give me their opinions. pretty pls...

- under $300k, max $320k
- can't be apartment, must have land component

I know its a hard request

My goals: to hold on to it as long as possible,

to get the most possible gain with minimal risk

/\
that being said, what I was referring to is that , im not looking for an area, that may go up or if it will its going to shoot up, and yes, I know the safer the area, the lower the gains...

so id prefer as close to the city as possible, however, getting 15-20kms of the city for $300k is near impossible, that my research has shown me, so I am not expecting inner city properties... actually prefer a house, preferebly run down so it has renovation potentital (that is if I deicde to rennovate) but not likely


any comments would be apprecaited, please throw around some ideas!!

I have a few areas to look at

box hill
frankston
epping

Click to expand...

almost guaranteed that you won't find such thing in Box Hill, even for a 2 bedroom unit (would be close to high 300k). Last time I looked at Epping back in July last yr any house with land that's close to train station (well located properties) are fetching low to mid 300k, and most of them are in high 200k, and this is BEFORE the mini-boom. However, I'm sure a unit under 300k should still be available.

Even for Frankston (Central and South), houses with land under 300k are scarce. You may be able to find houses in Frankston North for under 300k (and they were as low as sub 200k last yr). Could be the goer for you?

yeah I know,

cheapest unit in box hill I just found was $350-$390 on sale, maybe if I offer $325, I might get lucky!

akumaslair said:

- under $300k, max $320k
- can't be apartment, must have land component

Click to expand...

Hi akumaslair

With respect, but

cheapest unit in box hill I just found was $350-$390 on sale, maybe if I offer $325, I might get lucky!

Doesn't this contradict your criteria 'must' have land component?


There are some great deals out there, but the funny thing is that the more limits we put on the deal (before we find it) the less liklihood we have of finding it.

There are thousands of properties for sale at less than $320,000 but you have to be prepared to go and find them.

I have a customer just bought in Frankston - he has been wanting to move from Cranbourne for some time. He just sold Cranbourne for $260,000 and bought in Frankston for $260,000 and he is one Happy Vegemite!

Equally, the Western Suburbs are travelling well, and parts of the Northern Growth Corridor.


Run down houses do not produce the best rental returns. If you may or may not renovate and land component is very important but you may buy a unit, it's all a bit fuddled.

Are you focussing on yield or on the potential for capital growth?

There is a lot of pressure on rents right now. I saw some people today who have finally decided to buy as their rent has been increased twice in the past year. They understand why, but this is the push they needed to bite the bullet - and they have found a really nice place (family home) 15 minutes from Mulgrave for $275,000.


For yourself, have you done the sums on holding costs, possible rent returns etc Capital growth is all very nice but it doesn't pay the mortgage. During the last cycle of interest rate rises it was the properties with the best yields which helped their owners to keep them. Capital growth was off the menu for a while - for some suburbs, there was no appreciable growth for more than five years - but rental growth was far more important particulary when interest rates reached 18.5% (Investment rate in 1989).

In uncertain times, the 'good' investment is bought and structured from the inside out: What can you afford, what can you sustain, and then you buy appropriately for you. No point buying something which you can't afford to hold.


Land, distance from the city, peeling paint - it's all irrelevant if the deal itself doesn't stack up - for you!

Cheers
Kristine

Hi Akumaslair,

have a look at northern suburbs of Melbourne which will may give you more scope for growth and an entry that you may afford. Epping is one that you mention, that satisifies your 20 km requirement from CBD

If you are looking for a cheapie that is well located with transport, shops, schools and in my opinion undervalued area, investigate house (on 650-700 sq m) in central Broadmeadows. Good amenity with flow on affect likely to kick in as Glenroy is becoming expensive. Try to find a place within 1 km or less to the train and main shopping centre. You will still get change from 250 - 300K. Considered as an ugly duckling at preseent..............we need to recognise that it is 15-16 km from Melbourne CBD. Good roads and plenty of jobs in surrounding more industrial areas. House on land that close to Melb city won't stay at that price for long. Then there is always the potential of subdivision in the future and Hume council are pro-development. This satisfies your criteria for land content. Rents are at approx 5 % yield. Stock moves fast though and usually doesn't last the auction campaign period. Check it out for yourself.

akumaslair said:

My goals: to hold on to it as long as possible,

to get the most possible gain with minimal risk

Click to expand...

Risk of what?
Alex

michaelparis said:

Hi Akumaslair,

have a look at northern suburbs of Melbourne which will may give you more scope for growth and an entry that you may afford. Epping is one that you mention, that satisifies your 20 km requirement from CBD

If you are looking for a cheapie that is well located with transport, shops, schools and in my opinion undervalued area, investigate house (on 650-700 sq m) in central Broadmeadows. Good amenity with flow on affect likely to kick in as Glenroy is becoming expensive. Try to find a place within 1 km or less to the train and main shopping centre. You will still get change from 250 - 300K. Considered as an ugly duckling at preseent..............we need to recognise that it is 15-16 km from Melbourne CBD. Good roads and plenty of jobs in surrounding more industrial areas. House on land that close to Melb city won't stay at that price for long. Then there is always the potential of subdivision in the future and Hume council are pro-development. This satisfies your criteria for land content. Rents are at approx 5 % yield. Stock moves fast though and usually doesn't last the auction campaign period. Check it out for yourself.

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Hi Michael, I haven't had time to research into this area. Do you happen to live close by this suburb? Is there a clear sign of gentrification yet? I think there are quite a few potentials heading that way (as you mentioned Glenroy has gone up heaps), and gentrification is usually the spark.

What about Ringwood? 23km from the city, but soon to be a lot closer timewise with the opening of the new freeway.

http://www.realestate.com.au/cgi-bi...t=&header=&cc=&c=53129071&s=vic&tm=1207869125

Kristine.. said:

Hi akumaslair

With respect, but

cheapest unit in box hill I just found was $350-$390 on sale, maybe if I offer $325, I might get lucky!

Doesn't this contradict your criteria 'must' have land component?

Click to expand...

Hi kristine,

don't all units include a land component??? I hope I don't need to go back to basics,
basically, an apartment, is when you have more then one stacked on top of eachother, hence you share the land, however, I do know of a few apartments that the first floor has its own garden, so I guess the first floow apartment shares the land of the actual apartment, and owns the backyard... not too sure though...

feihong said:

Hi Michael, I haven't had time to research into this area. Do you happen to live close by this suburb? Is there a clear sign of gentrification yet? I think there are quite a few potentials heading that way (as you mentioned Glenroy has gone up heaps), and gentrification is usually the spark.

Click to expand...

not too sure what gentirification is, but I live about 40mins drive from there, and I have never been to epping or glenroy...... not a good start for me!

akumaslair said:

Hi kristine,

don't all units include a land component??? I hope I don't need to go back to basics,
basically, an apartment, is when you have more then one stacked on top of eachother, hence you share the land, however, I do know of a few apartments that the first floor has its own garden, so I guess the first floow apartment shares the land of the actual apartment, and owns the backyard... not too sure though...

Click to expand...

Might want to refresh the basics a bit here. I still don't understand the difference you're referring to between a unit and an apartment.

I think you misunderstand the body corp concept. Sure, a first floor unit may have exclusive use of its own patch of garden, but the body corp setup means that the people upstairs also have a 'part share' of the land underneath the building. Obviously one owner can't just carve their piece of land away, but usually 'land component' includes such 'shares' even if it's an apartment block and a unit might be 6 floors off the ground (note that I'm using units and apartments interchangeably here).

So when you hear people saying 'I want to buy a unit where the land content is at least 30% of the price' (see Rixter's CGA plna), it doesn't mean their particular unit is on the ground floor and physically sitting on 30% of the block of land. They mean if theirs is a block of 4, say, and the land value is $200k, then their land content is $50k and they won't pay more than $167k for it.

It's a part of the concept of 'land appreciates, buldings depreciate'. Even if your unit is on the 3rd floor, the dirt your building sits on still appreciates, and you benefit from that even though you can't actually do anything to the building without body corp permission. As the area gentrifies (i.e. become more residential, properties become nicer, people put money into it, etc) the value of the land and location goes up.
Alex

alexlee said:

Risk of what?
Alex

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basically, I don't want a property that is like Red or black at the casino,

50% chance of going down or 50% chance of going up 30% p/a

so basically, when I hear comments like, "oh, this suburb is supposed to be the next boom suburb because there is a rumour that they are going to build a shopping centre, now its dirt cheap, because no-one ones to be there ,and there hasb't been any growth"

so I guess a suburb that has had no recent capital growth..

am I making sense?

alexlee said:

Might want to refresh the basics a bit here. I still don't understand the difference you're referring to between a unit and an apartment.

I think you misunderstand the body corp concept. Sure, a first floor unit may have exclusive use of its own patch of garden, but the body corp setup means that the people upstairs also have a 'part share' of the land underneath the building. Obviously one owner can't just carve their piece of land away, but usually 'land component' includes such 'shares' even if it's an apartment block and a unit might be 6 floors off the ground (note that I'm using units and apartments interchangeably here).

So when you hear people saying 'I want to buy a unit where the land content is at least 30% of the price' (see Rixter's CGA plna), it doesn't mean their particular unit is on the ground floor and physically sitting on 30% of the block of land. They mean if theirs is a block of 4, say, and the land value is $200k, then their land content is $50k and they won't pay more than $167k for it.

It's a part of the concept of 'land appreciates, buldings depreciate'. Even if your unit is on the 3rd floor, the dirt your building sits on still appreciates, and you benefit from that even though you can't actually do anything to the building without body corp permission. As the area gentrifies (i.e. become more residential, properties become nicer, people put money into it, etc) the value of the land and location goes up.
Alex

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my friends apartment is 20 years old, he has is own back yard, the aprtment is probably 4 floors high, so in his backyard, which goes from his living room door, no-one else can access it, i think it may be one of the old style apartments.... sure I doubt he can do stuff to it...

but anyways, I was under the impression that units are always 1 floor high, like a townhouse, and usually have a small backyard of some sort, and have a land component, or have Ireally screwed up the fundamentals

akumaslair said:

basically, I don't want a property that is like Red or black at the casino,

50% chance of going down or 50% chance of going up 30% p/a

so basically, when I hear comments like, "oh, this suburb is supposed to be the next boom suburb because there is a rumour that they are going to build a shopping centre, now its dirt cheap, because no-one ones to be there ,and there hasb't been any growth"

so I guess a suburb that has had no recent capital growth..

am I making sense?

Click to expand...

A little too much sense, to be honest. So you want a suburb that has a proven record of growth. Which is fine, but recently Melbourne has experienced very high growth. Now, what will you do if the property you buy falls 10% next year? What's your game plan?
Alex

akumaslair said:

my friends apartment is 20 years old, he has is own back yard, the aprtment is probably 4 floors high, so in his backyard, which goes from his living room door, no-one else can access it, i think it may be one of the old style apartments.... sure I doubt he can do stuff to it...

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Yes, but that doesn't mean his neighbours upstairs don't have a nominal share of the land the whole building sits on, via the body corp 'units'.

akumaslair said:

but anyways, I was under the impression that units are always 1 floor high, like a townhouse, and usually have a small backyard of some sort, and have a land component, or have Ireally screwed up the fundamentals

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Does Melbourne have a different definition of units? Perhaps like 'villas' in Qld?

But really, who cares what they call it. That's just names. Buy what you believe in, something that you will keep holding onto even if it drops 10%.
Alex

alexlee said:

Now, what will you do if the property you buy falls 10% next year? What's your game plan?
Alex

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Just sit on it, I don't intend to flip properties unless I get a stupendously high offer!

and I will have a drink and lament the fact that my track record in timing markets is terrible...

and probably buy another one!

akumaslair said:

Just sit on it, I don't intend to flip properties unless I get a stupendously high offer!

and I will have a drink and lament the fact that my track record in timing markets is terrible...

and probably buy another one!

Click to expand...

So what's the problem? Pretty much any property in an established suburb will fit your criteria.
Alex

alrighty,, just an example, this one interests me, but because the auction is in 2 weeks, if this came up in 6 months, I d defintely, put in an offer if it was a private sale

http://www.realestate.com.au/cgi-bi...t=&header=&cc=&c=85460090&s=vic&tm=1207839132

this surely has land component right???

so its better then those shoebox new student apartments that are selling for a similar price without land componet, however this has more rooms, and is suited more for a small family..

I'd say St. Albans or Deer Park. St Albans in the corner closest to Kelior Downs and Keilor Plains train station should get you some potential under 300k with land, and potential to renovate; 19kms from city with alternative routes to the city (Western RR, Calder Fwy and Western Hwy). I've recently upgraded PPOR and bought another IP in St Albans last year, but if hadn't either, I would be looking to buy this year in this area.

I'd say stick with a house (if you can get a decent one .. not too old) in ur price range
This'll give u a list of suburbs Most Affordable Houses in Melbourne
If its not too far for you ... I'd recommend Eastern Suburbs (further from Ringwood) namely .. Croydon,Bayswater etc
Again if you can't find a house (with land component) .. I'd even settle for a sub-divided half block (400 sqm) townhouse

Good Luck !