Bayside apartment vs outer suberb unit/house

[mykie]

Hi all,

I am looking at purchasing my second IP in the next month or so and I was very curious to find out the thoughts of any experienced investors on this forum.

This is my dilemma, purchasing either an outer suburb property in Melbourne (Templestowe, Eltham) for 350k-400k or purchasing a low rise strata title 85-100sqm apartment in St Kilda West or a new apartment within an 8 story building in Port Melbourne.

My gut tells me that buying a low rise apartment in the bayside area of Melbourne is a sure thing however a property in Templestowe has the benefit of land and is not too far from the city either.

What do people consider a better choice for a investment? A unit/house 20-30mins from the city or a bayside apartment 5-10mins from the city?

Any help would be much appreciated!

 

[Propertunity]

outer suburb property in Melbourne (Templestowe, Eltham) for 350k-400k

Templestowe houses have done exceptionally well. But the median price there is $731K for a house and $445K for a unit.
Eltham is $505K and $370K respectively.

or purchasing a low rise strata title 85-100sqm apartment in St Kilda West

@ $337K for a median priced unit - I'd be going with your gut here...especially as figures from APM show a long term trend of CG for units here at over 13% which is just exceptional.

or a new apartment within an 8 story building in Port Melbourne.

Naaaaah.......5.3% long term CG - St Kilda beats it.

What do people consider a better choice for a investment? A unit/house 20-30mins from the city or a bayside apartment 5-10mins from the city?

Templestowe houses only come 2nd behind St Kilda units in the CG stakes but have a very high entry level.

I think your gut is right telling you buy a low rise apartment in the bayside area of Melbourne.

All the best with it.

 

[Peter Parker]

Hi all,

I am looking at purchasing my second IP in the next month or so and I was very curious to find out the thoughts of any experienced investors on this forum.

This is my dilemma, purchasing either an outer suburb property in Melbourne (Templestowe, Eltham) for 350k-400k or purchasing a low rise strata title 85-100sqm apartment in St Kilda West or a new apartment within an 8 story building in Port Melbourne.

The Heidelberg - Greensborough - Eltham -Manningham area is very very interesting.

When you look at the demographics it tops the state for things like health, life expectancy and happiness.

The north-east has a stable population as well of mainly owner occupiers.

When you compare house prices and incomes these areas do well (ie high average incomes, house prices not that high).

If you see the demographics you'll see nothing like it anywhere else in Melbourne.

A low-rise in St Kilda West is OK, but I like the house option as well.

Peter

 

[mykie]

The only thing I am concerned about with regards to a low rise apartment in St Kilda West is how it will look in 15-20 years for prospective buyers!

Also they are asking $400k and I am planning to place an offer of around $360-370k mark so I will see how I go.

 

[bennido]

My gut tells me that buying a low rise apartment in the bayside area of Melbourne is a sure thing however a property in Templestowe has the benefit of land and is not too far from the city either.

Well, you can both Bayside benefits as well as a land component by buying in outer bayside areas like Altona.

 

[Propertunity]

The only thing I am concerned about with regards to a low rise apartment in St Kilda West is how it will look in 15-20 years for prospective buyers!

Well in 15 - 20 years it will look about as hideous to prospective buyers as places that old + look now. The thing is 15 - 20 years should see 2 RE cycles move thru.

This should mean (all things being equal - which they aren't always) that your $400K property will be worth $1.6M in 20 years. If you have taken an IO loan/s all that time you will still owe $400K - so you have $1.2M in equity to do the place up if you want.

 

[Property Meister]

Well in 15 - 20 years it will look about as hideous to prospective buyers as places that old + look now. The thing is 15 - 20 years should see 2 RE cycles move thru.

sooo.......are you saying that something that is quite old will look hideous in 15-20 years


OR

anything that is lowrise or lowrise in St Kilda will look hideous in 15-20 years

 

[Lilli]

I would be looking at an apartment in St Kilda. Good steady CG, shouldn't have any problems finding tenants etc..

 

[mykie]

This afternoon my dilemma became more complicated when I began looking at some properties in the Brunswick-Brunswick West area. I have learned that Brunswick west has had some amazing growth over the last 36 months and yields are also quite good. I was hoping somebody else may be able to share some light on this area with either there own personal experiences and beliefs.

Although, the area is not my personal pick in terms of scenary and liviability I thought someone may be able to share the benefits of the area and and how attractive the area is for getting tenets? What type of market can I expect from Brunswick west.


I will endeavour to update the thread as often as possible with updates of my progress.

 

[mykie]

Also, what is the belief of everyone with regards to apartment blocks on main roads? The property I looked at today was on Melville rd which could be good or could be bad given trams are at the doorstep of the property?

 

[The Y-man]

Also, what is the belief of everyone with regards to apartment blocks on main roads? The property I looked at today was on Melville rd which could be good or could be bad given trams are at the doorstep of the property?

Would need to be at the back of the block (facing away from the street)

Cheers,

The Y-man

 

[The Y-man]

This is my dilemma, purchasing either an outer suburb property in Melbourne (Templestowe, Eltham) for 350k-400k or purchasing a low rise strata title 85-100sqm apartment in St Kilda West or a new apartment within an 8 story building in Port Melbourne.

Just to add to your dilemma:

Why not a house in Chirnside Park
http://www.realestate.com.au/cgi-bi...215&t=res&s=vic&c=27670799&p=10&tm=1229731102

or Croydon

http://www.realestate.com.au/cgi-bi...317&t=res&s=vic&c=27670799&p=10&tm=1229731102

or Mooroolbark?

http://www.realestate.com.au/cgi-bi...843&t=res&s=vic&c=27670799&p=10&tm=1229731102

My question to you is this: what is your search criteria?

Cheers,

The Y-man

 

[The Y-man]

Brunswick west has had some amazing growth over the last 36 months ........

....which might mean that the next 36 months could be no growth?

Cheers,

The Y-man

 

[mykie]

Y man,

Basically I am searching for properties that are attractive to tenets and will earn me a decent yield to help service the loan I take out. I have a firm belief in bayside properties as they continously perform well in terms of growth and vacancy rates.

I want to purchase an apartment/unit with at least 2 bedrooms and has a car space.

I don't know to much about the areas mentioned in your posts but I will endeavour to investigate further.

Thanks for your reply.

 

[VCDenton]

Same deal here but I am resistricted to much lower end of the market ~250K the mSo essentially I am looking at suburbs with unit price median around that figure.

With the reaaly uncertain current and future market I am more inclined to have higher yielding property as if the worst scernerio comes at least I can hold it without much stress on my cashflow, so that I perfer inner apartments as I would think that the tenants would compose of mainly porfessionals people and they are supposed to more resilient to this possible recession thing.......

However I am always told that more land content the better so I am also considering outer suburbs but one thing I need a clarification from u experienced investor is that whether those tenants in the outer pockets are more susceptible to this recession thing? so with higher chance of vancancy then lower yielding?

Really appreciate if u guys can give me some indication over my deliemma.

Regards
Vince

 

[mykie]

Vince,

Looks as though you are in the position I was in 18 months ago when I purchased my first property. My advice is be patient and look around for a smaller 1 bedroom apartments in the inner city fringe but not directly in the city. Take Melb for example I would stay away from 3000 post coded properties and purchase somewhere along the bay between St Kilda and Chelsea. I have strong faith in bay side properties as they continually perform well. Given the amount of capital you have you will not be able get anything remotely close to the city for <250K that has land, so go for an apartment.

A little more about my background I purchased a studio apartment in East Melb against the advice of many for 200k and now it earning me $300 a month after its mortgage repayment, which has put me in the position now to buy another property.

Good luck, I would love to know how you go.


Mykie

 

[Lamingtons]

Mykie I'm really impressed with your East Melbourne find.

 

[mykie]

Mykie I'm really impressed with your East Melbourne find.

Cheers,

I must say I got a bit lucky there but I guess sometimes we make our own luck!

 

[mykie]

Maribyrnong area VS Chelsea area

After much research and debate I believe I have come down two suburbs of choice for my 2nd IP. I believe both areas suit the astute investor and have great potential.

So if you were me, where would you buy, by the bay and little further out in the Chelsea area or in the known performing vicinity of Maribyrong?

I am looking to buy a small house or unit with a minimum of two bedrooms.