Brimbank Gardens - Derrimut or Eastern suburbs?

Hi,

I am looking to purchase an IP in Derrimut, Melbourne. There is currently a project in the Brimbank Gardens where land and house package starts around $340,000.00. It is located in the western suburb about 17 KM from the CBD and land size is ~400m2. Can anyone please advise if this is a good investment? Or shall I look at an established area in the Eastern suburbs? If I should look at the Eastern suburbs, will I get something in that price range? Much appreciate if somebody could give me advise on this. Thanks in advance..

NT
 
Simply looking at price won't tell you what a good investment is.
You need to do a bit of due diligence for the area and find out what is going on.
1. are there new schools, hospitals, auxiliary medical services such as new doctor's rooms etc, shopping malls, take-away food chain outlets being constructed or planned in council, new plans for improved public transport such as trains, and/or freeway extensions.
2. are there a lot of older properties being renovated - the area could be experiencing a gentrification like Williamstown, Richmond etc.
3. is it an 'overflow' suburb; near a more expensive suburb that has great amenities, but no-one can afford to live there anymore.
4. is there strong rental demand
5. is there good prospects for employment, good commerce and retail nearby.

You will find lots of areas in that price range, but you want the ones that are going to provide you with good cap growth, both short and long term, and hopefully some decent rent returns and also look for 'add value' possibilities.

Lastly, do some comparisons on existing similar properties in the immediate area for price to make sure the ones you are looking at are good value.
 
Hi,

I am looking to purchase an IP in Derrimut, Melbourne. There is currently a project in the Brimbank Gardens where land and house package starts around $340,000.00. It is located in the western suburb about 17 KM from the CBD and land size is ~400m2. Can anyone please advise if this is a good investment? Or shall I look at an established area in the Eastern suburbs? If I should look at the Eastern suburbs, will I get something in that price range? Much appreciate if somebody could give me advise on this. Thanks in advance..

NT

Hi There! I was just wondering if you have considered buying an investment property in Brimbank Gardens or if you changed your mind. The reason is that I am also planning to buy an IP in Brimbank Gardens in Dermuitt. The package is around $364,000.00 and the land size is 525m2. I currently live in Sunshine which is 10 minutes away from Brimbank Gardens by drive. With a lot of developments happening in western suburbs in the past year and also a lot of developments planned for brimbank gardens, i think the property will grow well in the next 5 years. However i am still reluctant to put my step into it as its a new area. let me know if you have come up with any new information or what you have decided about IP in Brimbank Gardens.

Regards.
 
Hi,

I am looking to purchase an IP in Derrimut, Melbourne. There is currently a project in the Brimbank Gardens where land and house package starts around $340,000.00. It is located in the western suburb about 17 KM from the CBD and land size is ~400m2. Can anyone please advise if this is a good investment? Or shall I look at an established area in the Eastern suburbs? If I should look at the Eastern suburbs, will I get something in that price range?

To answer your questions,

1. Probably not
2. Possibly
3. Yes

You can do much better with $340k, whether your favoured approach is 'quantity' or 'quality'.

If 'quantity', $340k could just get two older houses in somewhere like Melton with a total land area of 1200m2. Admittedly Melton is much further out but affordable housing is getting scarcer and Melton is one of the areas that still has it.

If 'quality', $340k could get a house on a big block in a lot of established middle distance and outer eastern suburbs. It won't be new but may have renovation potential. Most of these areas would have better capital growth potential than a new estate, which unless it is very special, often underperform established homes in their first few years. Note that the outer eastern suburbs have little new land are not growth areas yet have good demand. This is the opposite to many new estates.

Brimbank is known as a low socio-economic area and if it's a new estate services will almost certainly be lacking. It's OK to buy in a low socio-economic area (eg Melton) if you don't pay very much, but there's no point paying a fortune to buy in a cheap area if that same amount can get something in a better area.
 
Thankyou for taking timeout to reply to my post. If I was to buy an established house, I would have to take into consideration the cost of stamp duty, no or little depreciation on the IP and the possibility of higher maintance cost. Wouldn't it better to buy something off the plan and use depreciation to help reduce the tax for the early years and wait for the area to grow in value. Another advantage of a new property I believe is it would attract better tenant than an established house.
By the way, can anybody tell me which middle eastern suburbs I can get for $340K with a block of land and a house?

Thankyou again..
NT
 
Thankyou for taking timeout to reply to my post. If I was to buy an established house, I would have to take into consideration the cost of stamp duty, no or little depreciation on the IP and the possibility of higher maintance cost. Wouldn't it better to buy something off the plan and use depreciation to help reduce the tax for the early years and wait for the area to grow in value.

There are two things about that:

1. You're borrowing a lot more just to get some of it back on tax.

2. New places in their first few years are likely to grow slower than established homes. ESPECIALLY if they're near areas where existing homes are $100k cheaper. So the wait is likely longer, which is bad because growth now is desirable to reduce LVR.

About 2km to the east of Brimbank Gardens, on the opposite side of the Ring Road, is Sunshine West.

Sunshine West has double digit unemployment and a bad reputation.

But houses there start at around $200k, or perhaps even lower.

http://www.realestate.com.au/cgi-bi...eader=&c=44679436&s=vic&snf=rbs&tm=1192829656

http://www.realestate.com.au/cgi-bi...eader=&c=44679436&s=vic&snf=rbs&tm=1192829656

By buying in Brimbank Gardens, you are going to be paying $120-140k more than one of the places above. That's a big premium to pay. It would be silly to pay it unless you can be sure that capital growth on the new places is going to exceed the older areas.

Sunshine West might gentrify, or the ferals might over-run Brimbank Gardens and lower values. It's very hard to predict. But the risks are surely magnified if you pay a high price for something rather than a low price.

There's a huge number of $340k houses in the eastern suburbs, though they'll probably be outer east than middle east. Nevertheless eastern suburbs people are willing to live further out than western suburbs people, the supply of land is lower and there's more amenities in (say) Box Hill than Sunshine.

http://www.realestate.com.au/cgi-bi...header=&c=6342701&s=vic&snf=rbs&tm=1192830408

http://www.realestate.com.au/cgi-bi...header=&c=6342701&s=vic&snf=rbs&tm=1192830408

http://www.realestate.com.au/cgi-bi...header=&c=6342701&s=vic&snf=rbs&tm=1192830408

All you need is a Melway (2006 versions available from every street corner for $19.95) and realestate.com.au to find dozens of places like this and more.
 
Thanks, Spiderman. May I ask a very personal question? You don't have to answer this if you don't want. How many IP do you have and how many years have you being in the IP game?

Thankyou.
 
For $340K, you are looking at WAY WAY East !
Also, there's a lot more upside potential out west if you are looking at the long term. Its much nearer to the city, area is quickly developing and improving, lots of young families moving to the area, etc.
 
For $340K, you are looking at WAY WAY East !
Also, there's a lot more upside potential out west if you are looking at the long term.

You cannot be that certain of this, especially if you consider:

i. The east has low supply of land but high demand

ii. The west has abundant land and fair to good demand

What impact do you think that will on future capital growth?

You can't beat the west if you've got a small budget, but if the budget is higher then why not buy in the best area the budget allows?
 
know the area and driving passed it daily. I will say price growth will be slow.
area.s like cairnlea have been slow and most of the infrastructure is finished there. also there is a lot of heavy industrial building going on very close and you have the deer park by pass extremely close. you would probably be better to buy in Caroline springs if wanting a newer place easier to get a renter there as well with the shops schools etc.
cheers
 
Thanks, I have been told there will be a private primary school within walking distance and a local shopping center. With the VIC gov 2030 policy and migration boom should see these land quickly filled up with houses. Is that not the case?
 
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