Frankston investment

I am hoping that this new thread for Frankston will provide a fresh outlook on the pros and cons for investing or living in Frankston. Approximately 3 years ago I invested in a house there and my reasons for investing there where:
• Some of the cheapest property values in Australia,
• Reported as one the best “ugly ducklings” in Australia by Terry Ryder (Hotspotting 2007).
• Bayside location (beach)
• Newly completed Tollway Eastlink for faster access to CBD/Airport
• Planned $multi-million Marina with ferry services
• Challenges to culture with strong potential for changing the existing social framework
• Budgeted money for rail station improvements, street scapes and crime prevention
Many bag this city as not presenting a good investment due to myths and strong narrow minded views stemming from its history. I believe that this sheep mentality may cause many would be investors to miss the opportunity noting that property prices have already increased in this area over the past year or so.

Zebop

Everyone should invest in Frankston all the time.

Moreover, it is important that a thread be created on a weekly basis recommending that everyone invest in Frankston all the time.

PS: Did I mention investing in Frankston?

There's a number of these Frankston related threads.

As I've said previously, I purchased a 4br 680m2 brick house (about 40 years old) in Frankston North for $280k in early Feb. There is now a 2br 340m2 brick unit (about 4 years old) for $317k. It seems to me that a neighbouring suburb, Frankston North, is getting the ripple effect from Frankston. Fantastic news from an equity point of view.

You failed to mention the freeway extension which should ease traffic congestion, that's a positive for commuters. Also, it was named as 1 of the 3 hottest performers for 2010 by WBP.

http://www.yourmortgage.com.au/news/3875/default.aspx

Token Funder said:

Everyone should invest in Frankston all the time.

Moreover, it is important that a thread be created on a weekly basis recommending that everyone invest in Frankston all the time.

PS: Did I mention investing in Frankston?

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LOL! I've felt like saying something similar many times as each new Frankston thread starts. ..... I think there was 3-4 going at the same time for a while, .. anyway .. you gave me a laugh TF .......

Martin

mystery said:

LOL! I've felt like saying something similar many times as each new Frankston thread starts. ..... I think there was 3-4 going at the same time for a while, .. anyway .. you gave me a laugh TF .......

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Did I mention I was driving through Frankston on the weekend and there was one of those mobile signs with the words "Hoon Hotline 1800-989-???" Yep thats Frankston I thought.

Disclosure: I do own 2 units in Sth Frankston. You can never have too many Frankston threads. lol.

But having said that i am currently trying to find a new tenant. If i cannot lease it in a reasonable timeframe i will blame all these out of towners for investing in Frankston.

toony said:

...You can never have too many Frankston threads. lol.

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Yes
You
Can

OK, I do think TF has authored the seminal post on the subject.

But seeing zebop has asked for a fresh outlook, let me provide one from a local REA I spoke with on Tuesday. Last time we spoke was late 2009 and things had started going beserk in Frankston. On Tuesday he told me that it has really died down. Less stock over Xmas meant that prices held up very well but it hasn't continued as they had hoped. Don't know if this is due to more stock, interest rate rises or asking prices going up. Possibly all of the above. I asked about all the investors and was told that only the very low-grade stock, such as Frome Ave, was really moving. So the bottom end of the investor market is still OK, but 3 agents told me in late 2009 that it was boom time like they'd never seen it. From my cursory glance at the listings, I think the asking prices have risen and no-one is in a hurry to buy. Some things are sitting on the market for a long time.

BTW, the same agent told me that he's seeing valuations come in at 70% of sale price. I find this extraordinary, and to be honest this guy has a tendency to exaggerate. But even if it's not as low as 70% it is worrying. Perhaps bank/s are worried about prices in the area?

The upside of this is that some of these vendors will really want to sell. Eventually you should be able to pick up a stale listing for a good price.

new to frankston

Hello all,

I have spent the last hour researching past Frankston threads as I am in the process of buying my second property in Frankston. I have noticed that one agency eview on Nepean Highway has been putting large prices on homes in the areas I have been primarily looking and they aren't selling or are selling for well below their asking price.
I have spoken to a lot of people who tell me that this agency is constantly overpricing homes to get the business in order to drive out the competition, but I have also noticed that Harcourts then sells these homes after eview couldn't for their exaggerated price. Is this a common trend in Frankston? It makes it very hard to know what the true value of a property is and it is very frustrating. I currently have an offer on a property near Heatherhill Road and it looks like I might be in luck. Am I right in saying that there are some pretty unrealistic prices around at the moment?

marketfresh said:

Hello all,

I have spent the last hour researching past Frankston threads as I am in the process of buying my second property in Frankston. I have noticed that one agency eview on Nepean Highway has been putting large prices on homes in the areas I have been primarily looking and they aren't selling or are selling for well below their asking price.
I have spoken to a lot of people who tell me that this agency is constantly overpricing homes to get the business in order to drive out the competition, but I have also noticed that Harcourts then sells these homes after eview couldn't for their exaggerated price. Is this a common trend in Frankston? It makes it very hard to know what the true value of a property is and it is very frustrating. I currently have an offer on a property near Heatherhill Road and it looks like I might be in luck. Am I right in saying that there are some pretty unrealistic prices around at the moment?

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Just my personal opinion, as most posts are, the prices asked for in the Frankston market are based on what they could be in the future.

I'm from the school that thinks you can't lose on property so long as you use common sense. If you feel that properties are being overpriced, only put in an offer at what you feel the property is worth, more often than not your instincts are right. It's an old cliche but if it smells (like poo) too good to be true, it is.

I'm not as experienced as many perhaps are on this forum but I don't over analyse things. Some say don't buy in an area merely because they're cheap. Others, like myself, would say, well, buy in an area that is cheap because at a certain stage FHB won't be able to afford anything else (there are obvious exceptions).

marketfresh said:

.... Am I right in saying that there are some pretty unrealistic prices around at the moment?

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Yep. Some vendors are just trying their luck. It only takes a couple of, "OMG - They sold that place for WHAT?!" sales for some people to try & cash in on out-of-towner interest. Fair enough.
You may be right about eview but they are not alone in buying listings. Make sure you do not pay a price based on "what (it).. could be in the future." There should be enough stock to pick up something at a reasonable price, especially if people are willing to wait. Hopefully your purchase in Frankston Heights comes off.

Eview or any other agent will sell at a price that someone is willing to pay for a property and at a price that vendor is happy to accept.

They also sold 5 properties at auction the Saturday before with 100% clearance (first for Frankston) and as I understand they were almost all $400,000+ price point which is reflective of what the market is doing.

I have not spoken to any agents lately but believe that the asking price and selling price points have moved significantly in the last 6 months with the median marching up.

Frankston's median price is probably the most accurate of any other suburb in Melbourne for 2 reasons:

2-3 times the amount of data available as it is roughly 2.5 times the size of an average Melbourne suburb (excluding Fran North and South) and on average 20-25 properties are sold each week.

Second reason is that there is not a lot of variance in the price points within the stock sold (about 15% - 20%) so not a lot of too high or too low end statistics (excluding the $800k - $1m + beachside properties).

This means that we can take the Frankston median as being very accurate of actual market conditions ( so long as we are getting around 100 sales results per month) and the median has not shown any downward trend.

If anything, the recent success of the auction template will mean higher competition.

Having said that Frankston lagged behind Broadmeadows and Greenvale etc for annual growth so all the talk of "Frankston must increase because of abc.." might not be how the market sees it. The proof is always in the pudding and there is no better barometer of the pudding than comparing price points and market activity of Frankston with other outer suburbs.

Harris

just purchased

I successfully purchased my second property yesterday. Most agents I have met have been very helpful and facilitated my search for property very well although there were a couple who were not very helpful and borderline rude. Because I'm not shy in naming and I need only share the positives, I have had great help from Harcourts at Heatherhill Road and Andrew Milne. Both were very attentive and rang me with their new listings.
I look forward to watching the growth over the next few years, although Im unsure whether to renovate now and then put tenants in or put tenants in now (it is in livable condition) and renovate in a few years. Any thoughts?

marketfresh said:

I successfully purchased my second property yesterday. Most agents I have met have been very helpful and facilitated my search for property very well although there were a couple who were not very helpful and borderline rude. Because I'm not shy in naming and I need only share the positives, I have had great help from Harcourts at Heatherhill Road and Andrew Milne. Both were very attentive and rang me with their new listings.
I look forward to watching the growth over the next few years, although Im unsure whether to renovate now and then put tenants in or put tenants in now (it is in livable condition) and renovate in a few years. Any thoughts?

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Hi,

Congratulations will you be willing to share the details of your purchase with price to get an idea of the activity in Frankston, please.

The house I bought is in Frankston Heights near Heatherhill Road. it wasn't listed yet and the agent rang me knowing it was what I was looking for. I bought it for $415k. Good condition house on over 930sq block. 3 bedrooms with 2 bathrooms and a renovated kitchen. I want to do work to the ensuite and middle bathroom, but overall Im very excited about it.
I found it very difficult looking at properties because most of the time the good properties were sold before they hit the market, and those that are still advertised are either too expensive in a market where vendor's have high expectations or quite frankly they are garbage.
I went through with another buyer at the same time who also offered on the home, which i guess justifies the urgency in securing a good property.

marketfresh said:

The house I bought is in Frankston Heights near Heatherhill Road. it wasn't listed yet and the agent rang me knowing it was what I was looking for. I bought it for $415k. Good condition house on over 930sq block. 3 bedrooms with 2 bathrooms and a renovated kitchen. I want to do work to the ensuite and middle bathroom, but overall Im very excited about it.
I found it very difficult looking at properties because most of the time the good properties were sold before they hit the market, and those that are still advertised are either too expensive in a market where vendor's have high expectations or quite frankly they are garbage.
I went through with another buyer at the same time who also offered on the home, which i guess justifies the urgency in securing a good property.

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Sounds like a good buy, congrats!

Congrats on the purchase, marketfresh. Frankston Heights is a great area! Don't know who you bought through but I have found from the POV of seller or buyer that Harcourts Heatherhill rd (Tanja Neven-Jones) is excellent.

Regarding renovating it now, I wouldn't spend too much. Have a look at some rentals in the area to see what $ they're getting. Without seeing it, I imagine that sprucing up the bathrooms ($2-3k) would be worth doing.

marketfresh said:

... renovate now and then put tenants in or put tenants in now (it is in livable condition) and renovate in a few years. Any thoughts?

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Decide based on numbers.

For example, if the reno takes 4 weeks to complete & add 10k to value, then I would go for it, since closing the house to tenants only cost 1k over 4 weeks (assuming $250 pw rent).

Chase the big number, not the small one

marketfresh,

I would not spend any money on the prop if i were you.
I bought my IP in Frankston in 2007 and Andrew Milne RE has been looking after it ever since.

If you are looking for a tip for a Property Manager, i will at any time recommend Branko Radov from Andrew Milne.

Ps:- It has not been vacant for Even a day.

Shionm said:

marketfresh,

I would not spend any money on the prop if i were you.
I bought my IP in Frankston in 2007 and Andrew Milne RE has been looking after it ever since.

If you are looking for a tip for a Property Manager, i will at any time recommend Branko Radov from Andrew Milne.

Ps:- It has not been vacant for Even a day.

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I can echo what Shionm says - Andrew Milne are great property managers. Although my two in Frankston are not being managed by Branko, they are being managed by Cathy Rhodes - who, in my opinion, is also excellent. As property managers, the team at Andrew Milne know the Frankston market well and will put an appropriate tenant into your property, conduct 6 monthly inspections without being reminded (letters are automatically generated) and manage rental arrears with minimum fuss! Rent reviews also happen automatically. (Computer generated letters etc).

Before I found Andrew Milne, I was with another agent. It was a disasterous experience. Cathy fixed up the whole situation, (including taking the tenant to the tribunal and evicting her) helped me organize a reno on the property concerned (in fact, she did all the chasing around of tradespeople etc!), and found excellent tenants for the property who have been there since 2007.

Regards Jason.

good advice

All your thoughts help immensely, thank-you. I can echo the sentiments of your positive experiences with Harcourts at Heatherhill Road as well, they have been very helpful too date. I am going to spend a bit of money updating the bathroom but only just to bring it into line. A good property manager is difficult to find, as I believe they turn over more often than I have hot dinners! I moved my other property in Karingal over to the same company to manage recently as I was fed up with my old property manager not giving me any feedback, rental arrears etc and have been very happy with them. Their property management department is small and focused and I regularly get mail and updates on my property.
One thing that nearly deterred me from buying the home was that it has a sunken above ground pool, which I find it hard to trust tenants with. My thoughts would be that I really don't care how bad they leave the pool as it will probably come out if ever I have to sell it.
I plan on buying another property soon, and can't believe I have only just stumbled on this forum. Reading back at some of the other threads on Frankston is interesting to say the least. Odd characters on occasions.