1 Bedders in Melbourne

Hi everyone,

I've been keeping an eye on the market these past 12 months and have noticed the yields for 1 bedder units/villas are higher compared to 2-3 bedroom villas and townhouses.

Would love to hear your thoughts are on 1 bedder villas/units in the following areas...

- Sunshine / Albion: + proximity to CBD/Sunshine, - stigma, may have already have its growth
- Ascot Vale: + close to CBD, - cg growth not quite as strong
- Thornbury / Fairfield: + trendy, singles/couples prefer 1 bedders, - oversupply and future development in the area (thanks Beanie Girl!)
- Noble Park: + strong population, low vacancy, - stigma
- Spring Vale: + strong population, good history of cg, low vacancy, - may have already had its growth

I'm looking to purchase within the next few months and will hopefully have a budget up to $320, 000. My preference is Melbourne over Brisbane given the expected population growth/stronger real estate market and believe there might be still some good deals to be found.

My strategy is long-term hold (20 years), somewhat newer units/villas/townhouses within walking distance to a train station/shopping centre and that require minimal renovation.

Thanks for your help and insights! :D
 
I've been keeping an eye on the market these past 12 months and have noticed the yields for 1 bedder units/villas are higher compared to 2-3 bedroom villas and townhouses.
What we have found is: yes 1 BR gives better rental yield, but less CG.

Have only held a 1BR apartment in Fairfield out of all those suburbs.

The Y-man
 
Note that gross yields may be higher but so are fixed costs. Eg hot water systems, stoves, plumbing would be the same for 1x1, 2x1 or 3x1. Ditto for fixed charges the pm slaps on. These are proportionately higher for lower rent places. Still a reasonable sized 1br in a well located small block can make a fine investment.
 
1BR units usually have better yield than their big brothers because the purchase price is substantially lower while the rents are relatively similar amounts per week.

There's nothing wrong with 1BR units in Melbourne as long as you're buying in suburbs that have demand for them.

Inner city suburbs (further than 2km from CBD) still have plenty demand for 1BR apartments as they appeal to younger singles or childless couples who want to live somewhere lively whilst being a short commute to the city.

You can find what suburbs are best by looking at the median age of a suburb in the Census data. I'd say try and keep it as close to 30 years old as possible.

Also, don't buy in any large developments, or on main roads. Focus on good quality 1BRs that are bigger than 50sqm and have bedrooms bigger than 9sqm. Any smaller than this you'll have issues with LMI and LVR.

I'm not a fan of any of the suburbs you've listed as potential 1BR purchases. Think more along the lines of St Kilda, Prahran, Carlton North, East Melbourne and those types of suburbs that have great lifestyle attractions.
 
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