Advice needed for first IP (VIC)

[hc_andy]

Hi All,

I've got a budget of $250K and believe the time is right to invest now. We're looking at 3 properties at the moment to buy. All are 1 bedroom / 1 living area / 1 bathroom, and with the exception of Parkville, have a car parking spot.

1. Reservoir
2. Parkville
3. Coburg

Could those seasoned investors open my eyes a little bit and give me some feed back on my analysis of each of the properties below.

---

Reservoir (Auction $220,000 - $250,000)

http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2007680831

12 Km from CBD.
Rent estimated at $260/week.

Median Price $288,000
Long-term Trend 10.48%
Rental Yield 4.7%

Not sure how many other units in the complex because I haven't received section 32 yet.
Estimated to be atleast 8 units in total.

Pros:
- Quite new, only 5 years old.
- Within walking distance to train station, shops and shopping centre.
- Nice spacious indoor layout with outdoor patio to entertain and small shed for storage.
- Comes with a car parking spot.
- Rent is good.

Cons:
- A bit further out from the CBD than the other two units below.
- A bit more costly than the other two units below.

-----------------------------------------------------------------------------------------

Parkville (Private Sale $190,000-$210,000)

http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2007688083

Median Price $455,000
Long-term Trend 8.14%
Rental Yield 4.3%

4 Km from CBD.
Rent estimated at $210/week.

Part of 3 storey apartment complex, located on 1st floor.
17 apartments in total.

Pros:
- Inside looks well maintained with spacious living area and bedroom and a small outside balcony.
- Train station and tram stops nearby.
- Close proximity to CBD, park lands, universities, hospitals, etc...
- Parkville is a more affluent inner Melbourne suburb as seen by the median price.
- Might be a good investment if we want to enter into the Parkville property market.

Cons:
- No parking spot available but can be purchased for additional $8000.
- Street is located on a very steep slope.
- Train station is right across the road, might be noisy for some tenants.
- Nothing within walking distance except a petrol station.

-----------------------------------------------------------------------------------------

Coburg (Auction $200,000+)

http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2007678255

Median Price $317,000
Long-term Trend 10.17%
Rental Yield 4.6%

8 Km from CBD.
Rent estimated at $230/week

Part of 3 storey apartment complex, located on the top most floor.
78 apartments in total.

Pros:
- Nice unit, but a bit smaller than the other two units.
- Close proximity to CBD, park lands, universities, etc...
- Tram stops nearby.
- Comes with a car parking spot and additional storage area.

Cons:
- Nothing within walking distance.
- Narrow stair case to get up to the apartment.

-----------------------------------------------------------------------------------------

Which one would you choose???

Thank you in advance.

Andy

 

[The Y-man]

Check if courtyard is on title in Reservoir.
IMO By far the best pick of the 3.

The Y-man

 

[hysterical]

Check if courtyard is on title in Reservoir.
IMO By far the best pick of the 3.

The Y-man

Care to explain your thoughts on why it is the best of the 3 ?

Thank you

 

[hc_andy]

Location wise I'm more in favour of the reservoir property because it's in close walking distance to the train station and shopping centre. It makes it more convenient if you like things withing a walking distance I guess.

But if you have a car or like taking public transport then everything is pretty much close by as well which makes Coburg and Parkville attractive options.

Not sure what I can use to help me separate the three properties and come to a conclusion as to which one will be better in terms of capital growth (which is what I'm after).

Cheers.

Andy

 

[The Y-man]

Care to explain your thoughts on why it is the best of the 3 ?

Thank you

Number of units in the block, size of unit (and associated land - confirm), depreciation value.

The Y-man

 

[units4me]

What are the body corp/sinking fund fees per annum?

These can have a huge effect on your return and make a property very un-viable.

Do you also think that growth will continue at the same rate as the last few years?

 

[hc_andy]

Well the Parkville one ended up being over our budget. We were only going to offer $210K max for it, but the eventual price paid for it was $240K. It's interesting to see how the market works because in Nov 08, the unit next door to it sold for only $200K. Five months on and someone's willing to pay an extra $40K for it.

 

[Propertunity]

It's interesting to see how the market works because in Nov 08, the unit next door to it sold for only $200K. Five months on and someone's willing to pay an extra $40K for it.

This is the FHBG & boost working in the marketplace. Sorry you seem to have fallen victim to it. But it has been happening for the last 6 months. Come June 30 we'll see if it continues?

 

[hc_andy]

Yes you are right. Hopefully after June 30th we will see prices come down a bit as first home buyers start to leave the scene.

So far, prices are $20K-$30K more than what we had anticipated.

Parkville sold for $240K.
Reservoir sold for $260,500.
Coburg sold for $255,000.

Cheers.

Andy