Buying new away from the city (40kms)

Hello fellow members,

I need some advice. It's been a great forum and I am almost addicted to it. Before I raise the question, I just wanted to make it clear that I would like to know what could go wrong with what I am thinking and what are the main negatives. The questions is-

Is it a good idea to buy new house or build one in new estates further away from the city for investment purposes? This will be a long term hold, set and forget type of thing.

This interests me for following reasons.
1. Depreciation
2. No or very low maintenance for first few years. I have no time and I am not into renovations.
3. New attract tenants
4. My observation is that eventhough many would argue that new estates are everywhere and not good to buy in, people like community feel and prefer living in estates, as long as there is shopping complex, school and transport there.
5. Possibility of eventually myself moving into that property.
6. Fits my budget and gives me new home with land component

Is there any member here that buys new in outer suburbs for investment purposes?

Please note that
I am aware of closer to CBD advice but not keen on it.
I am not keen on buying a big block with rundown house and subdivide it.

Please share your thoughts.
Thanks in advance.
 
Depends where.. You'd get a different answer for each state.. If you go far from the city i'd go something that doesnt have land land before it closer to the city.. You want a place that'll have demand when the estate is sold out as that'll push your prices up.
 
You could go 75km to Geelong
or 85km to Ballarat
or 100km to Drouin/Warragul
or 150km to Bendigo
or 320km to Wodonga
etc.

Even in Victoria there is more to property than "Melbourne" and "the CBD" :p Why pick only 40km? And South-East?
 
You could go 75km to Geelong
or 85km to Ballarat
or 100km to Drouin/Warragul
or 150km to Bendigo
or 320km to Wodonga
etc.

Even in Victoria there is more to property than "Melbourne" and "the CBD" :p Why pick only 40km? And South-East?

Eventually you might reach Kalgoorlie
 
not strict 40 kms, that was just a rough guide..In better words, looking at the end of Metropolitan rail line in Melbourne which is roughly 40-50 kms from city centre..hope it makes sense..South east because east is too expensive..West I don't prefer and I have little knowledge of outer north..

yes, few thousand kms and I can also go international..the question was more about buying new for investment relatively far from city..
 
not strict 40 kms, that was just a rough guide..In better words, looking at the end of Metropolitan rail line in Melbourne which is roughly 40-50 kms from city centre..hope it makes sense..South east because east is too expensive..West I don't prefer and I have little knowledge of outer north..

yes, few thousand kms and I can also go international..the question was more about buying new for investment relatively far from city..

Don't like new normally and don't like that far from the city especially so if in new estates, better off not buying anything in most cases compared to buying in Pakenham and Cranbourne.

Some good research would be to look at some resales of houses 3-5 years old in these areas and compare the cost to complete home to what they sold for. Then compare that growth with other areas of Melbourne.
 
This interests me for following reasons.
1. Depreciation (Wrong motive)
2. No or very low maintenance for first few years. I have no time and I am not into renovations. (Only if built by quality builders/developers)
3. New attract tenants (True but doesn't mean you will get $50 more than existing one, maybe you're get 10-20 extra per week?)
4. My observation is that eventhough many would argue that new estates are everywhere and not good to buy in, people like community feel and prefer living in estates, as long as there is shopping complex, school and transport there. (I don't really understand what are you trying to say here)
5. Possibility of eventually myself moving into that property. (wrong motive, too emotional, either stick with investment only or PPOR, when you mix both you will see yourself stuck in the long run)
6. Fits my budget and gives me new home with land component (slightly wrong motive here, do not get stuck into the free stamp duty scheme because in your purchase price you've over paid which already cover your stamp duty fee as if you are buying existing property)


my 2c :)
 
Don't think you're on the wrong track just because someone here tells you you are.. Do your research yourself. If numbers work then do it. If it helps you sleep at night then do it. If not, stay away
 
It sounds like you are not clear on your motivation.

You need to ask yourself three questions:
1. What is my financial goal?
2. How does this property help me get there?
3. What other ways/properties can I reach this goal?

Once you are able to answer these questions you will know if you should buy here or somewhere else.

For example, other options may include established places that are 5-10years old. They will still have depreciation, still have less maintenance than some very old places. BUT will have (probably) ironed out all the builder kinks

Buying established property doesn't mean you HAVE to renovate or subdivide. We have bought two properties that we just rented out because they were good to go and are working well for us as set and forget investments (for now).

Some of the downsides of buying in estates on the outskirts is that there is ALWAYS more land available. What makes buying closer to the city attractive is that there is land scarcity - there is no more land available, so when people want to live there they have to pay more. When there is lots of land available people don't have to pay more.

Doesn't mean it's not a good idea, but it has to fit in with your larger goals and plans.

Just my 2c
 
Eventually you might reach Kalgoorlie

Point being if one is going 40km+ from the Melb CBD, there are other CBDs that can provide opportunities. eg, most of Geelong isn't much more than 5-8km from the Geelong CBD. And there is plenty of opportunity to buy new. Same with Warragul/Drouin.

And if you really want, either of these are about 1hr (and maybe a bit) on Vline for commuting to the Melb CBD.
 
Agree with everything plus with new builds from our experience 'saving' on stamp duty is offset by the interest on the progress payments so evens out pretty closely in the long run hence this is not a valid reason although spruikers push the 'saving'
 
my opinion is that if interest rates go up and we start to feel the squeeze, the new estates will feel it first and take longer to recover. I believe this is the case due to people buying there because they thats what they could afford and there would probably be large number that have 90%+ mortgages and couldn't survive a few interest rate hikes and have to sell out quickly which flood the market and lower prices.

Just my opinion

Tim
 
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