Hi all -
My wife and I are looking to spend up to $800,000 on an IP. Ideally, we would like to purchase a 3 bedroom apartment with ocean views in Fremantle, South Fremantle, or North Coogee, WA with the idea that we would move into it when we downsize in about 15 years or so. We both work, and intend to stay working in perth until we retire, and can afford to negatively gear (cover the shortfall between income and mortgage repayments on) a property up to about $30,000 per year if needed. We are only interested in buying existing property (not one off the plan).
These two apartments at 52 Rollinson Road are very close to what we would like:
2 bed $789,000
http://www.realestate.com.au/property-house-wa-north+coogee-111716095
3 bed $695,000
http://www.realestate.com.au/property-apartment-wa-north+coogee-108532441
The 3 bedroom is very close to perfect (it has all the space we would need, is in a secure complex, and is currently the cheapest 3 bedroom apartment with Ocean views in the area). The only downside is that when a couple more apartments get built in next to the Islands apartment on Ocean drive, the ocean view will disappear. This unit is currently rented at $620 per week, but an identical apartment to this (same building, same level, same # bedrooms) is advertised at $995 per week. Another 2 bed unit is advertised at $875 per week. The real estate agent said she thought around $850 per week for the unit would be fairly realistic.
So, we are considering one of three scenarios:
1) Don't buy either of these, and wait (up to a year) and see if something better comes along. Specifically, one of the same units in this building one or two floors higher will still have quite a good ocean view even after the Ocean drive developments happen. There is bushland and beach access immediately between this property and the ocean, which I don't believe would be built on.
Pros: If property values go sideways or down, we might be able to get exactly what we would like. If interest rates go down, we may be able to afford a bit more.
Cons: If property values go up, we may have missed one of the better opportunities to get a property that is about 75% of our dream.
2) Buy the 3 bedroom and rent it out for 1 to 15 years, then try to sell it when something better becomes available.
Pros: If property values go up, we will have got into the cheapest 3 bed apartment with ocean views (for a while) that we can afford.
Cons: We would need to sell under pressure. If rents go down, we may lose out on some cashflow.
3) Find the best cashflow property (or properties) possible (we would still only consider Perth, as we want to be able to visit the area ourselves before purchasing) for $800K.
Pros: Maximise our income over the next few years so that when the perfect apartment comes along - even at a higher price, we may be able to afford it. If we bought two properties, we may be able to sell one and keep the other when it comes time to downsize.
Cons: We would have to take a hit on the cost of buying and selling one or two other properties.
Any advice on our situation would be most appreciated!
Thanks in advance,
RandT
My wife and I are looking to spend up to $800,000 on an IP. Ideally, we would like to purchase a 3 bedroom apartment with ocean views in Fremantle, South Fremantle, or North Coogee, WA with the idea that we would move into it when we downsize in about 15 years or so. We both work, and intend to stay working in perth until we retire, and can afford to negatively gear (cover the shortfall between income and mortgage repayments on) a property up to about $30,000 per year if needed. We are only interested in buying existing property (not one off the plan).
These two apartments at 52 Rollinson Road are very close to what we would like:
2 bed $789,000
http://www.realestate.com.au/property-house-wa-north+coogee-111716095
3 bed $695,000
http://www.realestate.com.au/property-apartment-wa-north+coogee-108532441
The 3 bedroom is very close to perfect (it has all the space we would need, is in a secure complex, and is currently the cheapest 3 bedroom apartment with Ocean views in the area). The only downside is that when a couple more apartments get built in next to the Islands apartment on Ocean drive, the ocean view will disappear. This unit is currently rented at $620 per week, but an identical apartment to this (same building, same level, same # bedrooms) is advertised at $995 per week. Another 2 bed unit is advertised at $875 per week. The real estate agent said she thought around $850 per week for the unit would be fairly realistic.
So, we are considering one of three scenarios:
1) Don't buy either of these, and wait (up to a year) and see if something better comes along. Specifically, one of the same units in this building one or two floors higher will still have quite a good ocean view even after the Ocean drive developments happen. There is bushland and beach access immediately between this property and the ocean, which I don't believe would be built on.
Pros: If property values go sideways or down, we might be able to get exactly what we would like. If interest rates go down, we may be able to afford a bit more.
Cons: If property values go up, we may have missed one of the better opportunities to get a property that is about 75% of our dream.
2) Buy the 3 bedroom and rent it out for 1 to 15 years, then try to sell it when something better becomes available.
Pros: If property values go up, we will have got into the cheapest 3 bed apartment with ocean views (for a while) that we can afford.
Cons: We would need to sell under pressure. If rents go down, we may lose out on some cashflow.
3) Find the best cashflow property (or properties) possible (we would still only consider Perth, as we want to be able to visit the area ourselves before purchasing) for $800K.
Pros: Maximise our income over the next few years so that when the perfect apartment comes along - even at a higher price, we may be able to afford it. If we bought two properties, we may be able to sell one and keep the other when it comes time to downsize.
Cons: We would have to take a hit on the cost of buying and selling one or two other properties.
Any advice on our situation would be most appreciated!
Thanks in advance,
RandT
