Buy My F irst Property

[mark]

Hello to all,

My name is Mark, i'm looking to buy my first house for a rental property. At the moment i'm looking at Hoppers Crossing. Could i have some input on what people think of the area (is it an up and coming area?), has anyone had exp. in buying and selling in Hoppers Crossing?

Thankyou for all your input,
Mark.

 

[gailh]

Hi,

While Hoppers Crossing has had good growth in the last two years (alongwith the whole of Melbourne), it is an area that was flat for some time. There's a lot of land out that way and I would not favour it for capital growth.

Gail

 

[foxysilvers]

Hi Mark
I will only speak from my own general experience in Hoppers Crossing and similar areas and not refer to median prices etc as you really must do your homework.

Hoppers Crossing like most outer Western areas have almost unlimited blocks of land and a seemingly endless number of builders constructing houses.

I have built three spec houses in HX over the years and sold two at a bit of a peak and sold one in 1988 for $117000 which is now back on the market for $175000.

The older houses in HX were built on stumps in very unstable soil so a concrete slab is a must.

The rental return is reasonable due to the low buy price but capital gains are poor.

The standard of renters (all through an agent) were a real mix with the usual whingers and midnight skippers. But overall not too bad , the major problem was getting long term leases.
Many renters are waiting for their own house to be built or are in transient occupations.

I would imagine there are many houses for rent in HX and the general Werribee area so competition may be fierce.

If you can put up with a lower return but much better potential capital growth why not look closer in towards the city.
Even an old ex RAAF house in Laverton at the right price may be a better bet.

Cheers

 

[Kristine..]

Mark

The prime rule in investing is to get as close as you can to the CBD.

This does not mean East Melbourne, or inner Sydney, Perth etc

What it means is:

If you can arrange finance to, say, $250,000 then get as close 'in' as your money will buy.

If that means Hoppers Crossing, then think a little laterally and draw a radius around Melbourne where your market is.

You may find that eg Caroline Springs is a better bet, or Bayswater, or Coburg. West Heidelberg, if you've got the vision!

In other words, use tools like www.realestate.com.au and search the for sale and for lease listings to give you an idea of rental returns.

Hoppers Crossing has many good points, but my suggestion would be to buy in the older area closer to the freeway, rather than in the newer subdivisions.

Remember, your tenant may be saving for their own home, and would appreciate only having to have one car. They can walk to the shops, schools, doctor etc from the older, eastern part of HX, plus there's room for improvement and thus potential for capital growth above the median for the area.

Lastly, Mark, if your interest is in HX, then go with your instinct, spend a bit of time driving the streets, loiter in the shopping centres and observe the locals and their spending habits. Who will be your tenant is more important than you may realise!


Good luck!

Kristine

 

[Rolf Latham]

Hi Kristine

250 k in Sydney gets you within 40 to 70 ks of the CBD :O) if you want a house.

Melbourne is so much more affordable in the middle burbs.

Ta

rolf

 

[foxysilvers]

Mark.....I just remembered something that may also be of interest.

The original Werribee township homes , say within a K of the Fire Station are starting to become popular with the local baby boomers. These people are moving in from HX and Whyndam Vale so they can walk to the shops, hospitals etc and most importantly the restaurants, pubs and RSL. (No breath testing of pedestrians yet as far as I know)

These older homes are usually very solid and fairly easy to update and would probably appeal to renters also.

Old local agents like McNaughtons seem to have most of this type of listing as old Werribee folk only deal with "locals".

Maybe worth a look........Cheers

 

[Kristine..]

Yes Foxy

And - the gardens are established, there are street trees, established neighbours, and the population is multi-age grouped.

My experience recently in Ringwood is that the existing and, in some cases, original neighbours, are just thrilled that someone has come in and is spending some money doing up the rundown properties.

I've noticed that the nearby neighbours have become much more active in their gardens and around their houses since I've been there. They've all got inspired and pruned and tidied if nothing else.

So a shabby house in a shabby street may not look like that for long! Go for it!!

Kristine

 

[Skye_30]

Geelong

What about Geelong?

So many of the corporate Melbourne workers are buying up here. The likes of Torquay, Barwon Heads, Clifton Springs, Indented Head, Portarlington etc, have gone throught the roof with people buying holiday homes and even comuting.

Geelong has been going throught a big growth rate at the moment with the renervations to the waterfront, Melbourne road and the soon to be built bypass off the melbourne rd to bypass Geelong CBD as the traffic coming in off Melbourne is fernominal now.

I would consider Geelong as apposed to HX at the moment, as in my view Melbourne people are starting to go further afield. Even to the likes of Bannockburn which is growing fast at the moment.

 

[mark]

I think your right that Geelong would be alittle better the HX but, from what i know, not much better. I dont know really anyone that has made money from buying a house in geelong ( i could be wrong ).

I wouldn't mind having some more input on this matter.

Mark.

 

[trump63]

My first prop. too.

G,day
Ive just signed some of the final documents for purchasing a property. Im glad to hear im not alone in this game as im a new player. Small towns are a great place to start, I have secured a bargain up here in Townsville Nth Qld.
Good luck...

Trump63

 

[Skye_30]

Mark

I know people who have made money off IP's in Geelong, unfortunatly they sold to early and although they made a huge profit, are regreting it now.

I live in Geelong and bought my 1st PPOR and moved in march. We recently had the property valued for the purpose of changing over to a IO loan, and we have gone up in value by $60k.

The beauty of Geelong was not noticed for so long, but now is with all the renervations to the waterfront. Also it is only 15-30min drive to the likes of Torquay, Ocean Grove, Barwon Heads etc. All these places have boomed so much with people wanting to be by the coast (especially Melbourne people)now Geelong is the next best thing. If you can't be on the coast, then be near it...

If you don't know Geelong very well, then look at your map and count how many beaches are withing 30 mins drive. I'd say about 10. It seems to me through observation that people arn't wanting to be in the big cities anymore. What does everyone else think?

 

[XBenX]

Re: My first prop. too.

Originally posted by trump63
G,day
Ive just signed some of the final documents for purchasing a property. Im glad to hear im not alone in this game as im a new player. Small towns are a great place to start, I have secured a bargain up here in Townsville Nth Qld.
Good luck...

Trump63

Post some details ?

Im always interested to hear about other peoples deals

after theyve signed - dont want anyone gazumping you of course

 

[mark]

what is the current median price of a house in Geelong and what was it 5 years ago and 10 years ago?

if you could supply me with this information, it would be great!

 

[Skye_30]

Not sure if I can answer that one correctly....

St Albans Park was a new upcoming estate about 4 years ago starting off slowly. It was situated next to an estate which was considered to be a bit low in standerds and was resonably cheap.

You could by a house and land package in St Albans for about $140 starting point depending on the house you built, the land was usually around $32k. I signerd a contract for my house to be built there in Nov 2001 for a land price of $31k for what is classed as a cotage block. Now my house is valued at $60k higher and it isn't yet finneshed (landscapping, fences, driveway). The low standard estate I mentioned, you would be paying at least $15-$160k for now (ex commission mostly) That same estate you could buy a house for about $60-$70k for when I first came to Australia 9 years ago.

There has been a huge price boom here in the last 1-2 years. My opinion is this..........
I am in the process of looking at land at the moment to build again. I can't find a block of land for less than $74k ANYWHERE in Geelong or surrounds. Therefore, how can the average family start off to buy thier first home, prices have increased hugely and so has the deposit. Which to me means the rental market should be very high and stay that way for a while.

Norlane is the cheapest place you can buy in Geelong. 2 years ago for about $50-$110k. Now $70-$130k ish. Rent in Norlane is about $120k upwards.

 

[BKH]

Hoppers Corssing will give you good rental returns of between 6-7%. Of course it depends what you are after. Being your first investment property you will be more cautious and seeking a balanced investment.

Being a cautious investor I looked and invested in Werribee in 1996 and 2000 and had good returns as well as good rental returns.
Knew that the market had stagnated for a number of years and had to play catch up soon with the rest of the Melbourne market. Whilst I still expect reasonable capital growth over the next couple of years, say 15-20%, (hey it may be more) I also anticipate that it will reduce to a more realistic level of 5-7.5% after that. But these are hold (for my future pension) not sell properties. And I only anticipate that to buy another 2-3 over the next 5 years I am not really interested in great growth vs rental. Both are postivey geared so are paying themselves off.

Below are the vauler general's prices for the last 12 years for the region.

At present Hoppers Crossing prices, in the lower 25% range is $180-220k. For Werribee is is $150-170k
rental in HX is around $200-230 and Werribee $170-185 pw

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 12 yrs 6 yrs 3 yrs
Werribee 106 102 102 100 100 97 96 92 99 110 123 135 150 141.509434 156.25 121.9512195
Hoppers Crossing 110 110 106 104 106 110 110 117 120 130 142 158 169 153.6363636 153.6363636 119.0140845

Why did I look at this region becaue I know the area well and can identify a bargain. I am also keen on some othe regions in the west closer in to the CBD that will boom ( or have just done so so missed the boat)

 

[JSD]

Originally posted by BKH
Hoppers Corssing will give you good rental returns of between 6-7%. Of course it depends what you are after. Being your first investment property you will be more cautious and seeking a balanced investment.

Being a cautious investor I looked and invested in Werribee in 1996 and 2000 and had good returns as well as good rental returns.
Knew that the market had stagnated for a number of years and had to play catch up soon with the rest of the Melbourne market. Whilst I still expect reasonable capital growth over the next couple of years, say 15-20%, (hey it may be more) I also anticipate that it will reduce to a more realistic level of 5-7.5% after that. But these are hold (for my future pension) not sell properties. And I only anticipate that to buy another 2-3 over the next 5 years I am not really interested in great growth vs rental. Both are postivey geared so are paying themselves off.

Below are the vauler general's prices for the last 12 years for the region.

At present Hoppers Crossing prices, in the lower 25% range is $180-220k. For Werribee is is $150-170k
rental in HX is around $200-230 and Werribee $170-185 pw

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 12 yrs 6 yrs 3 yrs
Werribee 106 102 102 100 100 97 96 92 99 110 123 135 150 141.509434 156.25 121.9512195
Hoppers Crossing 110 110 106 104 106 110 110 117 120 130 142 158 169 153.6363636 153.6363636 119.0140845

Why did I look at this region becaue I know the area well and can identify a bargain. I am also keen on some othe regions in the west closer in to the CBD that will boom ( or have just done so so missed the boat)

Hi Mark, I have just purchased a property (25/01/03) in Werribee. Like you, I am new to property investing.

I paid $157,000 for a property with 4 bedrooms + study built in 1994. The rental yield should be around 7%.

If you look around you can find some really good deals, though I would look at Laverton for capital growth.