Building in Rosebud Avenues

[markxr6t]

Hi all

I live in Perth but have just bought a block of land in Rosebud, out of Melbourne. Its 390 sq metres, only 10.6m wide and 300m from beach. For those who don't know Rosebud, its 60kms South of Melbourne on the Mornington Peninsula, still something of a holiday town but (for those from WA) it looks like Busselton but less than Mandurah distance from Melbourne. Huge potential, I reckon!

I want to build on it purely as a long term buy and hold IP. Capital growth is my main goal, but maximum cash flow would also be nice. I've made some intial enquiries through project home builders like Simons, JG King etc..

I'm trying to steer away from thinking that cheap = good value when it comes to maximising long term returns, and would like to try and get it right. Therefore, I'd love your opinions on the following:

1. Single or double storey? A 150 sq metre single storey 3br 2bth can be built for $116k, 200sq m for $140k
or
a 240sq m double storey 3br + study, 2 bth with Alfresco for $193k.
Add $20k minimum to finish both off. Double storey is obviously more expensive, but I should get at least $30pw more rent and given its location and my faith in this area's future I can still see value in going double storey... What do you think?

2. 3 or 4 bedroom? Given I can put an extra bedroom on any of the designs for another $10k or so, do you think its worthwhile doing this for extra rental return and capital growth?


Thanks for any opinions

Mark

 

[gussman]

You might struggle to fit a single storey 200sqm house on a 390sqm block.

 

[Twitch]

Sometimes public forums won't give you the information you need. This is one of those times, so I'd suggest
1) talking to the local council, specifically the planning department about the building requirements including set backs, site coverage, over shadowing etc
2) ringing some local PMs and discussing rent levels for the different dwellings you're thinking of.

Good luck, and I agree Rosebud has great potential

 

[Minx]

Hi all

I live in Perth but have just bought a block of land in Rosebud, out of Melbourne. Its 390 sq metres, only 10.6m wide and 300m from beach. For those who don't know Rosebud, its 60kms South of Melbourne on the Mornington Peninsula, still something of a holiday town but (for those from WA) it looks like Busselton but less than Mandurah distance from Melbourne. Huge potential, I reckon!

I want to build on it purely as a long term buy and hold IP. Capital growth is my main goal, but maximum cash flow would also be nice. I've made some intial enquiries through project home builders like Simons, JG King etc..

I'm trying to steer away from thinking that cheap = good value when it comes to maximising long term returns, and would like to try and get it right. Therefore, I'd love your opinions on the following:

1. Single or double storey? A 150 sq metre single storey 3br 2bth can be built for $116k, 200sq m for $140k
or
a 240sq m double storey 3br + study, 2 bth with Alfresco for $193k.
Add $20k minimum to finish both off. Double storey is obviously more expensive, but I should get at least $30pw more rent and given its location and my faith in this area's future I can still see value in going double storey... What do you think?

2. 3 or 4 bedroom? Given I can put an extra bedroom on any of the designs for another $10k or so, do you think its worthwhile doing this for extra rental return and capital growth?


Thanks for any opinions

Mark

I would go for the single story if you only aim to lease it. I'm unsure if you have been there especially in summer but Rosebud cannot be compared to Sorrento and Portsea.
It's far from Melbourne so I doubt many would rent there and commute into the city for work. I would assume it would be locals who would be leasing.

Personally I don't think that that area will peak anymore. It'll be a steady increase.
That area and it's surroundings peaked about 4 years ago. My parents bought a corner block in Rye and the block next door and the area increased by 60-80k in like 18 months.
I would go for the double story if you intend on selling it down the track and would go for 4 bedroom as that's ideal for a beach house as you generally go down as a family or with a group of mates (as I do).

 

[markxr6t]

Thanks for your replies and input -all useful things to consider.

I don't necessarily think Rosebud will peak, but living Perth and watching everyone's obsession with near-water living I think its guaranteed for steady and better-than-average long term growth.

The builders seem reasonably switched on about what will fit on the block and how.

I don't actually value the opinion of many of the Rosebud RE Agents and their property managers after dealing with many of them. One I did think was OK suggested similar to above - single storey for maximum return/ minimal cost and double storey to be worth more in the future. He did also suggest that $300+ a week rent I'd want to justify a double storey may be hard to come by for the people likely to rent in Rosebud.

So whilst single storey is the logical choice for an IP, I have this nagging feeling in 10 years time that I'll wish I'd spent the extra $35 - 40k on a double story. Conversely, in the same 10 years if I had built double storey its unlikely I'd wished I'd spent $40k less for a smaller single storey.....

Hmmm - maybe I've answered my own question?

 

[Minx]

Thanks for your replies and input -all useful things to consider.

I don't necessarily think Rosebud will peak, but living Perth and watching everyone's obsession with near-water living I think its guaranteed for steady and better-than-average long term growth.

The builders seem reasonably switched on about what will fit on the block and how.

I don't actually value the opinion of many of the Rosebud RE Agents and their property managers after dealing with many of them. One I did think was OK suggested similar to above - single storey for maximum return/ minimal cost and double storey to be worth more in the future. He did also suggest that $300+ a week rent I'd want to justify a double storey may be hard to come by for the people likely to rent in Rosebud.

So whilst single storey is the logical choice for an IP, I have this nagging feeling in 10 years time that I'll wish I'd spent the extra $35 - 40k on a double story. Conversely, in the same 10 years if I had built double storey its unlikely I'd wished I'd spent $40k less for a smaller single storey.....

Hmmm - maybe I've answered my own question?

If you want to sell in 10 years stick with the single storey, it's a greap IP plan. If you want to sell in 3 years go the double story and you will make money on it. Your REA is right, most people wouldn't be able to spend $300+ per week on rent there.