Armadale/Malvern/Caulfield for first IP

D

dolphin123

Hi Guys,

I'd appreciate any advice with our first investment property as I am a newbie.

We are looking to buy our first IP around the $550k-$600k range. We really like the south eastern suburbs, ie Armadale, Malvern, Caulfield (VIC).

I know that we will be are probably unable to get a house in that price range so we are looking for an apartment/unit - at least 2 bedrooms and parking (~80m2). Preferably close to the heart of the suburbs - ie close to transport, shopping centres, etc etc

Does anyone have any suggestions? Do you think I'm priced out even for apartments for these areas? Does anyone have average figures for these areas?

Any advice is welcomed. Thanks all
 
Hi dolphin123,

Welcome!

Just wondering what your strategy is for investing...am guessing it's capital growth judging by the suburbs you're looking at?

Do you have some equity in your PPOR as the price range you're looking in is quite expensive for an IP?

Regards,
M&M
 
Thanks guys for comments.

Idriver: Yes I have considered Prahan and South Yarra and may be our PLan B. I really do like the Malvern, Armadale area though.

Mary&mat: Yes my strategy is capital growth, hoping to maximise as much of our quity as possible. Apologise for the newbieness, what is PPOR? Are you saying that $600k is too expensive for an apartment or is it too much for a first IP ?

Also just wondering if 9% growth in these area are possible?

Thanks
 
Some schools of thought are saying capital growth will be slow for the next few years down here in Melb & rents will be on the rise. As for 9% growth, your pick is as good as anybodys' but it sounds rather high at the moment.

I don't know your individual circumstances, so I can't really say whether $600K is too much as you may be earning $1M+ for all I know :)

At 7%, your repayments would be around $3500 a month, on top of that you may have Body Corp fees, you would have rates, insurance, repairs etc. What would potential rent be on a place like that...even at $500 a week, you'd still need to come up with an extra $1500 a month & that's just for the loan.

If your finances allow that, it's still a lot to come up with each month. If capital gains slow for a few years, it wouldn't be much return on your investment. However, if you buy a place that is quality & ticks all the right investor boxes, & you can hold out a few years before property prices start to pick up again, you may make substantial gains then.

Average figures for those suburbs will be at the back of API magazine.

For what it's worth, I love those suburbs too & hope you can find something that fits your budget :)
 
So…did you say you wanted to buy an IP? Then how come you really want to buy in the Malvern etc area? See, I myself want to buy here too but can’t afford it but I’d want to LIVE in it, so I actually care what area it is, you know? If I was buying an IP I’d buy in whatever the quickest growth area was (and not a place full of ferals). Lol. I was in Melbourne at Christmas and was entranced by the area around the corner of Glenferrie Road and High Street. LOVE! Lol. (used to live in Brighton when I lived in Melbourne for the first 25 years of my life)

Anyway, with that price range you could get a 2 bedroom apartment, definitely. They begin around the high $400s as far as I can tell, but for something really NICE, you’d be in the $600s maybe.
 
http://www.realestate.com.au/property-apartment-vic-armadale-107310739

$485k for a run down 1 bedroom apartment in denbigh road armadale....

I am not really seeing any value in this one after a 20k renvovation, stamp duty, and future selling costs.

the property would need to sell for $550k before there was any property in it.

And that is not taking into account the massive amount of negative gearing that would be required to hold the property.

I fail to see how this stacks up as investment grade.

I equal this to paying $145 for RIO tinto!

I just dont see the upside in the short to medium term on this one.
 
I live in East Malvern
great area to live in but I do not think
the returns for Ip's are there
you will be heavily negative geared.
I would sugest Carnegie as been close to east Malvern and Caulfield
but the returns would be much higher
for the amounts you have refered
 
i beleive st kilda east still has some value. 2 bedroom apartments can be had from 430to 460, and tthe big ones go for up to 670. carnegie is on poor yields below 4 percent in my view.
 
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