First IP where to buy in Melbourne

Hi all,

Planning to buy first IP in Melbourne need advise where should i buy currently looking in Sunshine, Sunshine west, Glenroy, Albion or should I go Geelong or Ballarat somewhere near city area.

Unit or independent houses??

For first IP should I go with property with Positive cash flow or negative cashflow (all sort of property available) reason its learning step for me.

Loan approved for 400k got 70k in bank.
 
First step is to educate yourself! Books, this forum, the more the better.

Once this is done you will be able to answer these questions yourself. Most are how long is a piece of string type questions and giving guidance without your specific circumstances is difficult.

I would start by searching negative gearing to understand it, and avoid it IMO if possible. Especially if you don't have a large income as it will very quickly end future purchasing power.

Plenty of information on all those areas you are interested in on these forums if you take the time to search.

I would also look at building your team. Not sure how you found your loan but I would look at getting a GREAT broker that understands INVESTMENTS if you don't have one already. This will help you long term and avoid traps.
 
Hi

Hi,

Before choosing a area, you have to ask your self what is your goal?
Once you know what your goal is choosing a area to invest in becomes allot easier.

eg: My goal is only to look at properties "in certain areas" that can demolished and where two or three town houses can be built.

Where I first started investing in property 10 years ago at the age of 20, my aim was to buy a property and then sell in it 5 years for a capital gain.

Which I Did so the property I bought had good capital growth.
 
Agree with the above comments.

It's also good to know what your end goal is, where do you want to take this?

In terms of areas, personally I'm a fan of Sunshine and surrounds. I think they have a lot of potential, relatively cheap to buy into (and rent) but I personally believe there's a lot of growth to be had out that way.
 
If you are new and going into property investing for the first time. I would suggest:

1. Work on your end goal. What you are trying achieve and why? That will guide you on what types properties to purchase, where, yield, capital growth or cashflow etc

2. Form a team. Property investing is a team sport. Don't try to do this yourself. Create a team who share your goals and have achieved what you are after already. This includes mortgage brokers/banks, accountants, solicitors etc.

Once you have done the above two then think about purchasing. You will find all those questions you listed on where, types of properties and cashflow will all answer themselves.

Good luck, it's an exciting journey!
 
Thanks for replying to this thread. My goal is buy property and hold it for 4-5 years maybe more (not renovation specialist :eek:).

I do have broker sorted out and looking for good accountant and conveyancer/solicitor.

Been reading this forum for last few months learnt lots of things, inspired from so many people reading there interview (Michael X, Property Girl). Everybody says don't wait just do it ;) and strategy will come with experience.

There are lots of thing still too mess and learn for me :). Will appreciate if someone teach me along the way.

I have been in contact with some investment property agents who tries to sell you houses in regional area for 500k and says its cashflow positive, beach front, I can use my super etc. etc. And after reading people experience on this forum everybody says avoid them.

Now going solo (but will build team before investing) and need advise for my first IP - (A)House in Ballarat 160-180k rent 200 weekly (cash positive) buy 2 off them with 400k loan
(B)House in Sunshine 370k rent 320 weekly (negative cashflow) (not fixated on these location just example)

Situation mentioned above is so confusing for me right now. I know I have to find my own answer in there according to my financial position and my future goals. But been novice I believe I can ask stupid questions and learn. What strategy is good for newbie like me A or B
 
Why only hold for 4-5 years? Transaction costs involved with buying and selling could destroy any profit. Returns compound over time so unless you are approaching retirement consider expanding your time frame greatly unless it is a poor investment IMO
 
Hiya and welcome to SS. I've been here 8 months and learning a lot and asking stupid question. Lots of people here happy to help. I too struggle with goals and strategies so I'm setting short term goals and go from there.
 
First and foremost 5 years really isn't enough time to buy/hold and sell a property and make any decent amount of money (unless we boom again which isn't looking likely right now). 7+ years is a safer timeline. If your goal is to create a portfolio it's possible to take equity from the IP to purchase more if it performs well enough, so maybe consider that if 4-5 years is your timeline.


$160k-$180k in my opinion is too low for Ballarat/Bendigo... $200-$250 is really the entry level price so you're not buying in less desirable suburbs or properties that don't fit all of the correct selection criteria. (Good size block, brick house, quiet street, right zoning, correct orientation, etc, etc)

I think with a budget of $400k going regional (Ballarat/Bendigo) isn't a bad idea though. Both areas are predicted (By Residex) to grow up to 6% in the next 5-8 years for houses which is better than Greater Melbourne's 4% (This changes dramatically from suburb to suburb though). You'd be potentially better off spending a bit more and getting a higher quality property so you have better tenants and hopefully more growth.

As far as your other suburbs, Sunshine and surrounds is okay but try and stay well away from the pro-development areas like Taylor's Hill, Deer Park etc as they've got so much stock coming on the market that these areas are really only good for people who want to buy a family home and hold it for a considerable amount of time (if we're talking growth).

Finally, I agree with what the other members have said. Work on an end goal (or at least a reasonable exit strategy for this property), learn as much as you can before jumping in or get someone who genuinely knows what they're doing to help and last but not least create a team... Property investing one of those avenues to wealth creation where you need to know several specialists to achieve good results.
 
Due to your equity position a growth property bought well with an okay yield would me my first move if I was in your position. You don't want something too negative as this could limit your options moving forward yet need some good growth as a base to be able to purchase again. I would take your time with research and make a move when a good deal presents itself, there is no right or wrong strategy other than a lack of research IMO
Good luck
 
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