how do we get into melb property,which good cheaper suburbs and strategies please.

[Francine]

how do we get into melb property, its so expensive

which good cheaper suburbs are there to look at

and strategies please that could help

crunching numbers?
small flat?
subdivision?

please can you give some advice and details thanks.

how do we make sure we can afford it eg if we see we have put a certain amount in rent for years that should show we can afford that much

and i've heard you should calculate for a higher interest rate than what exists incase.

what choices can we have to get out of renting thanks.

 

[meconium]

Big blocks, kind town council development rules and good infrastructure will get you where you want to go as far as capital growth goes.

The cheaper areas of beachside Melb - in particular the much maligned suburbs of Seaford and Frankston - represent excellent value. These two suburbs are eminently affordable and have good capital growth prospects. Most blocks are good for redevelopment. Pull down the current house & replace with two new townhouses.

http://www.domain.com.au/Search/buy...earchterm=Frankston&displmap=0&sort=price-asc

 

[Francine]

thanks for that much appreciated

is geelong better or worse than frankstone

what would they cost in frankstone or geelong as apposed to closer into melbourne.

whats mulgrave like? and what would it cost there does anyone know?

so are their any suburbs closer to the city that are much cheaper and still quite good.

 

[Cherry Pro]

Hi Francine

If you tried realestate.com.au or domain.com.au, you could quickly check out prices in any VIC suburb that you are considering.

If you did a search on the suburb here, it would throw up threads on the suburb which make really informative reading. Frankston and Melton have a life of their own here on SS.

And then it pays to do your own due diligence.


Good luck !

 

[Intrinsic_Value]

can i ask a stupid question, why do you want to get into Melbourne property NOW????
You have been on this forum for several years (since 2007) and you are from melbourne, so why the overriding emotion to buy now?
Why didnt you buy in 2008 when the market was soft?

 

[keneth]

As an example there are 2 places listed in newport for $290k-$320k. they were purchased for $165k and tarted up in the last 12 months. i think they are on blyth street. I remember looking at them before i bought mine.

i dont know what part of the market your looking at.

but in melbourne bottom end has risen 50% i think.

I sold mine 15 months after purchase for 70% above what i paid after some renos.

i am looking at adelaide or brisbane now... need to do research, but i dont see any value in melbourne property right now compared to rents received.

if rates hit 8-9% i think melbourne will be a poor performing city at the end that i am looking to invest in.

I want a 2 bedroom villa, and they are 400-440 in melbourne, and 280-320 in adelaide. close to the beach.. different market i know, but just the way i am looking at it. affordability to hold and then renovate.. thats my strategy.

 

[Neophyte]

I'd like to help but the original post is so confused.

It's very hard to know what you mean by expensive. A lot of suburbs in Melbourne, especially closer in are very high prices for houses and even units.

Its not clear if you are looking to buy to live in or to buy to invest. These are two very different things with different priorities.

To work out the finances of what you can afford use an online mortgage calculator (there are plenty out there), talk to a mortgage broker or talk to a bank. If you can't figure out your own finances in terms of income and expenses then get that sorted out first.

Apparently you have 500+ posts so you seem very lost for someone who has been around a while.

 

[RumpledElf]

Apparently you have 500+ posts so you seem very lost for someone who has been around a while.

You might want to read some of those 500+ posts ... a lot of them are quite entertaining and not very property investment related

 

[Bill.L]

Hi all,

Francine,

whats mulgrave like? and what would it cost there does anyone know?

There is Mulgrave, there is Mulgrave and then there is Mulgrave. Ie, there are different subsections/neighbourhoods, with different characteristics.

As I have often stated, we use to own property there, in the older section near the big intersection. We bought for $44k in 1981, sold for $110k in 1990. The house across the road was for sale in 2004/5 (there is a thread here about it and it was essentially the same as ours) for $250k. Now in the area there is pretty much nothing under ~$400-420k.

These are ordinary 3 X 1 houses, BV and Weatherboard. Quite a few houses in the area are getting knocked over to build units/townhouses (2 per average block).
Personally I think this area of the suburb has had it's boom and will probably not offer huge growth, if any, over the next few years.

bye

 

[Francine]

thanks Bill and Keneth and those who gave helpful info and hints much appreciated!

 

[JamesGG]

Possibly a silly question (particularly on this forum); but, Francine, can you tell us *why* you want to buy a property...?

 

[Lil Skater]

Possibly a silly question (particularly on this forum); but, Francine, can you tell us *why* you want to buy a property...?

Or if you are looking to buy as a PPOR or as an investment.

Because if you're looking for a PPOR it doesn't seem you have a set area you wish to live in, which is strange in my opinion.

Also, as pointed out earlier (sorry not sure of posters name) but you live in Victoria, yes? So what is your reasoning to be getting into the market at this particular point in time?

Also, without giving exact numbers or anything - do you have any other properties? Investments or PPOR?

 

[Francine]

Thanks James and skater and all others who have given quality advice.


it is for one of my children who dont want to waste 1000 a month or more being in the renting cycle. They want to own property, get ahead financially,

he may be better off buying a big place and renting out to students, whether he lives there in a granny flat or something or not.
he has already done this sort of thing a bit and in his own place would be a great way to get into the market .

do you have other strategies.

whether to live in or to rent out to students to pay off that mortgage fast or a bit of both happening.

I dont know many things eg

1how suburbs compare that are cheaper, eg someone mentioned seaford, but theres also geelong, or frankstone or hastings or balnarring or other parts of mornington peninsula. what are the cheaper suburbs that could be good and still go up in value the most over the long term and not have problems like street gangs , crime etc

2 how much of a deposit he would have to save

3or what ways a relative could help him without losing everything themselves
eg wylie mentioned on another thread that one can be gurantor for a certain amount only say 100 000
and rolf mentioned other things
eg that he can get income insurance
( i'm not sure how that works and how to get a good plan what it should included)

I dont want to see a relative in their old age go under financially and lose everything by going gurantor or from people making uninformed decisions
in property choice, strategy, reno, finance timing, suburb and way they help the person enter the market if they do

however i dont think i can stop them helping and i want to lower the risk by giving some loving guidance if i can get any decent info for them

my son is quite handy and i know also a very cheap and reliable builder who could help renovate cheaply enough to make a dump into a livable place, but i dont want mistakes.
buying and building 2 units may be a big feat for a young first timer.


****he may be better off buying a big place and renting out to students, whether he lives there in a granny flat or something or not.

I would not have been able to enter the market 20 years ago without this persons assistance and i'm lucky with mamoth personal challenges that i've somehow survived that it all gone ok with my mortgage and didnt lose all for that relative.

shes old and could make bad mistakes and i want to minimise risks and maximise good choices for both the buyer ( my son) and the guarantor or helper.

 

[Bill.L]

Hi Francine,

I would not have been able to enter the market 20 years ago without this persons assistance and i'm lucky with mamoth personal challenges that i've somehow survived that it all gone ok with my mortgage and didnt lose all for that relative.

i want to minimise risks and maximise good choices for both the buyer ( my son) and the guarantor or helper.

So why don't you go guarantor for your son instead of an elderly relative??

This is one of the reasons why many of us have been in the property investment game, to have the ability to help out family members if necessary, even for things like being a guarantor for a loan.

Which begs the question of why does your son need a guarantor?? Does it mean he has not been able to save money for a deposit?? If he has not been able to save the required amount, then he should perhaps lower his sights in regard to how much to spend on a property, if he can really afford it at all.

bye

 

[Lil Skater]

He may be better off buying a big place and renting out to students, whether he lives there in a granny flat or something or not.

1. How suburbs compare that are cheaper?

2 How much of a deposit he would have to save?

3. What ways a relative could help him without losing everything themselves?

I dont want to see a relative in their old age go under financially and lose everything by going guarantor.

Hi Francine,

He may be better off to buy a larger house and rent out to students, but then he would need to buy something near a University (Box Hill or other) and he would need a larger deposit and more income to support a loan for the home as it will be more expensive than a 1 or 2 bed unit.

1. If you do a search on google to find all the Universities in Melbourne you could then punch these suburbs into realestate.com and see what he can afford.

If you're looking for cheaper suburbs, look up what people have already suggested (Frankston has no "E"), although many of these have a higher crime rate so talk to agents that live in the area and ask their opinion of the area, or i'm sure someone on here would live near Frankston, Seaford etc, and be willing to give you their opinion on the area.

2. 10% is the standard deposit, sometimes you can get away with 5% or less but usually it's 10% of the purchase price, but remember he will need to save more unless he gets a larger loan to cover any repairs, stamp duty etc.

3. If your son cannot save a deposit/get finance for a property someone could go as guarantor, otherwise if they own their own home they can draw equity from their homes to help your son out without losing out themselves.

If you don't want to see someone in their old age lose out, don't approach them.

So why don't you go guarantor for your son instead of an elderly relative??

Which begs the question of why does your son need a guarantor?? Does it mean he has not been able to save money for a deposit??

Exactly, why can you not be guarantor or help him out with equity from your home and why does your son need a guarantor?

Does he not work? Why not?

Doesn't earn enough income? In this case he's aiming too high if he can only borrow $200k and wants a $500k property.

Can he not budget to save for a property?

 

[Deltaberry]

Your son's not still studying yea...?

 

[Francine]

THANKS skater.

I am not going as gurantor. I've spent decades having huge challenges and upheaval in my life from people around me, caring for others, eg a very sick child, which was important, but meant i couldnt build my own financial situation. i need to care and build my own situation currently. I do not have a huge income and huge security etc. its not an option at all.

he has an average or lowish income and would never be able to pay rent and save to get into the melbourne market at the rate of what it costs.

and wasting 1000 on rent every month stops him being able to save for deposits and mortgage.

he has shown ability to rent to students and earn from doing that with relatives properties , and he can work and earn and pay rent reliably.

he is smart and very eager to find a way into owning rather than wasting so much of his wage on rent. I know the feeling. I was in that situation and worse for a long time before i was able to buy with this relative going as guarantor on the loan without owning the house. they have had no involvement in the loan ever since even though its in both our names.

strategy, suburb, lowering risks are all important.

 

[Deltaberry]

He could rent in a shared house. Could half his rent bill straight away.

 

[sash]

Now is NOT the time to jump into the Melbourne market. It is at its peak....even though it may seem that paying rent is dead money..it is not.

To put it in perspective.....even if you son gets into the lower end of the market in Melbourne say for 220k the interest repayments itsellf (which is equivalent to dead money) is going to be about 13k per annum. Add to this about $2000 for rates and maintenance. He is paying the equivalent of $1250 per month in rent.

If he is serious perhaps he could share a house with 3 people for say $100 per week and accumulate a bigger deposit.

From my perspective...it is unlikely the current levels of growth in the Melbourne market is sustainable.

he has an average or lowish income and would never be able to pay rent and save to get into the melbourne market at the rate of what it costs.

and wasting 1000 on rent every month stops him being able to save for deposits and mortgage.

he has shown ability to rent to students and earn from doing that with relatives properties , and he can work and earn and pay rent reliably.

he is smart and very eager to find a way into owning rather than wasting so much of his wage on rent. I know the feeling. I was in that situation and worse for a long time before i was able to buy with this relative going as guarantor on the loan without owning the house. they have had no involvement in the loan ever since even though its in both our names.

strategy, suburb, lowering risks are all important.

 

[K_Raheja]

Hi Francine
I suggest you can have your son join this forum himself, its a gr8 way to learn and get a perspective from experienced investors.