First time buying/investing in Melbourne dilemmas

Hi guys,

Need your help.

My partner and I have pre-approval (no deposit, with guarantor) for purchase of up to $450k + stamp duty etc.

Our aim:
To get into the market then use equity to buy closer to city in 3 -5 years by subdividing and keeping, or selling land, house or both.

Our plan
To find a PPoR on a sub-divisible block (wide side access, >600sqm etc) in an area that looks to be on the rise. We're betting on Sunshine West, Albion or Sunshine North (priced out of Sunshine).

My questions/what's keeping me awake at night:
1. Do we go for bigger house that requires less work on 697sqm in Sunshine West for $450k OR smaller, uglier house on 603sqm in Albion for $405k?
2. OR, could we get the same financial result in another way? ie. Should we be looking at smaller land in better areas (St Kilda, Coburg, Footscray, etc)?

Bonus info:
- I work in CBD so prefer < 30mins travel to work
- Need 3 bedrooms or 2 + study
- Have dog and cat so outdoor area is preferable but could do without if it meant a better financial move in the long run

Residex Data:
Sunshine West: land value $450/sqm, forecast 5yr growth 3%, yield 4.4%
Albion: land value $583/sqm, forecast 5yr growth 6%, yield 4.1%
Sunshine North: land value $712/sqm, forecast 5yr growth 4%, yield 4%

What would you guys do in our situation?

*waits for the wisdom*
 
Option 2: Buy an IP meeting your requirements, rent where you want to live.

The Y-man

That's what I do. Rental yields drop significantly the higher you go, so I'm renting a really nice townhouse close to town which is worth about 700k but I'm only paying $390 a week. Then I use my money to invest in IP's. I'd love to live in one of my IP's but the numbers don't add up.
 
I personally like Albion. Have you looked at somewhere close to Deer Park train station (5-10 min walk) or is it too far for you?
 
Are you/ partner handy and willing to have your hand dirty? You can buy rundown building in better suburb as an IP and renovate it. It can boost the equity in a short time frame. It is my choice but may not suit everyone.
 
That's what I do. Rental yields drop significantly the higher you go, so I'm renting a really nice townhouse close to town which is worth about 700k but I'm only paying $390 a week. Then I use my money to invest in IP's. I'd love to live in one of my IP's but the numbers don't add up.

Wow I would hate to own that investment 700k for $390pw return why would anyone want to lose that much money,I can see why you rent there instead of owning property there.
 
Are you/ partner handy and willing to have your hand dirty? You can buy rundown building in better suburb as an IP and renovate it. It can boost the equity in a short time frame. It is my choice but may not suit everyone.

Yeah, we're happy to do as much work ourselves as possible. There's a place in Albion with a terrible floor plan but very cheap we're considering. Would need walls/kitchen moved.
 
Have you considered places like Glenroy?
Glenroy has zone 1 station, train gets to the CBD in 25-30 mins.
Easy run into the city via the Tulla by car. Easy to get to the airport.
3 supermarkets - Coles, Woollies, IGA and plenty of other shops and takeaway food.
It's easy to subdivide and build in Glenroy.

Here's a sample of houses for sale: -

http://www.realestate.com.au/property-house-vic-glenroy-116213467

http://www.realestate.com.au/property-house-vic-glenroy-116096431

http://www.realestate.com.au/property-house-vic-glenroy-116004719

http://www.realestate.com.au/property-house-vic-glenroy-116132095
 
why would anyone want to lose that much money

This is my second rental bargain. First one was owned my a bunch of rich doctors that bought long ago when it was cheap. This one is also owned by some pretty wealthy people too who bought a whole bunch of them when they were cheap. You'll usually find these people have so much money and are so busy they aren't going to worry about a few hundred bucks and don't spend much time checking what the current market prices are.
 
Having lived in the west for a number of years I would definitely take Albion over sunshine west. There is not a lot going on in sunshine west and it's far too industrial. Albion is a small niche pocket which I think will be quite sought after in years to come
 
We're not lending at our limit to repay so will either refinance or use money my parents will be giving me after their subdivision.

If you are buying with no deposit, how do you plan on paying for the subdivision/ development?

Cheers
 
My $0.02:

I'd rank them as follows:

1) Albion
2) Sunshine North (but only in the McIntyreRd/BerkshireRd/DukeSt/BallaratRd square. Definitely not west of McIntyre or north of Berkshire)
5) Sunshine West

not a typo. I'd place St. Albans and Braybrook (two areas near Sunshine), I'd place them above Sunshine West. Just my opinion of course. I don't really like Sunshine West despite it being closer to CBD than say St. Albans.

Also:

I know someone who was looking at buying in Glenroy but ended up buying in Broadmeadows. Personally I would've stuck with Glenroy between those two, but his unit was purchased for around $290-310k and he's renting for $320/wk so it's not too bad.
 
That's what I do. Rental yields drop significantly the higher you go, so I'm renting a really nice townhouse close to town which is worth about 700k but I'm only paying $390 a week. Then I use my money to invest in IP's. I'd love to live in one of my IP's but the numbers don't add up.

+1 from me. Buy an IP & rent elsewhere. You'd probably find that a buyer's agent will find a place that is predicted to grow X amount, for X equity by 5 years time when you'd be ready to move to where you want to. Also, saving towards your goal in the meantime
 
We ended up putting in an offer on the cheaper, 4 x 2 in Albion on subdivisible block, which has been accepted.

As we have no deposit, we worked out that investing in an apartment might get us some growth but not as much as selling land and house separately down the track. Time will tell.

Thanks for your thoughts guys!
 
We ended up putting in an offer on the cheaper, 4 x 2 in Albion on subdivisible block, which has been accepted.

As we have no deposit, we worked out that investing in an apartment might get us some growth but not as much as selling land and house separately down the track. Time will tell.

Thanks for your thoughts guys!

Congrats. Now coming the fun reno stuff. And moving to adding value topic.
 
My $0.02:

I'd rank them as follows:

1) Albion
2) Sunshine North (but only in the McIntyreRd/BerkshireRd/DukeSt/BallaratRd square. Definitely not west of McIntyre or north of Berkshire)
5) Sunshine West

not a typo. I'd place St. Albans and Braybrook (two areas near Sunshine), I'd place them above Sunshine West. Just my opinion of course. I don't really like Sunshine West despite it being closer to CBD than say St. Albans.

I second that, I am currently residing in Albion and I am loving every second of it. It is strategically positioned as there are plenty of shops including supermarkets, train stations, schools, etc.

Personally, I think Albion's land value will far surpassed Sunshine in the coming years and as many have said in this forum, sunshine is such an industrial area and if you've lived in that area for far too long, you might lose that sense of "community/neighbourhood". Also, I can't emphasize this enough, be sure to do your research on reliable properties sites, such as:

1. http://www.realestate.com.au/buy/in-albion,+vic+3020;+/list-1
2. http://properties.mitula.com.au/albion
3. http://www.realestateview.com.au/po...tial&portalsection=buy&jpdate=1&jpday=1&bs=12

Happy hunting!!
 
I second that, I am currently residing in Albion and I am loving every second of it. It is strategically positioned as there are plenty of shops including supermarkets, train stations, schools, etc.

Personally, I think Albion's land value will far surpassed Sunshine in the coming years and as many have said in this forum, sunshine is such an industrial area and if you've lived in that area for far too long, you might lose that sense of "community/neighbourhood". Also, I can't emphasize this enough, be sure to do your research on reliable properties sites, such as:

1. http://www.realestate.com.au/buy/in-albion,+vic+3020;+/list-1
2. http://properties.mitula.com.au/albion
3. http://www.realestateview.com.au/po...tial&portalsection=buy&jpdate=1&jpday=1&bs=12

Happy hunting!!

Jacky, we bought here:
http://www.realestate.com.au/property-house-vic-sunshine-115293003

Other than the Perth St shops, is there anything in that pocket or do you travel to Sunshine for groceries?
 
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