In or out

Hi there.

My question for the 'clever ones' is, is it better to purchase an IP closer to the CBD, even if it's all old suburbs with old houses, rather than further out? The rents will be fairly much the same, and the properties may be too.

Any thoughts?
 
Gunna,

I think a very simple maxim to go by is, 'buy as close to the CBD as you can afford', or alternatively, 'buy as close to water as you can afford (proximity to services, CBD and leisure are also important here).

I"m sure that if you look at capital growth you will notice that there is an inverse relation between distance from the CBD and cap growth. A similar pattern will be found in terms of distance and cap growth for properties by the sea. And this inverse relation holds pretty much true over time.

However, these days with masses of apartments being built in the CBD, there is a lot of competition for the rental market. Best to stick to houses. But then, I'm biased .

Desto.
 
Hi there.

Thanks Desto, yes I was referring to houses and not units. The area that I am buying in is a large regional city, if that makes any difference.
 
Hi Phm

I agree with much of what Desto says, however, I don't like CBD in any city.

I have seen a map drawn of BNE and the concentric rings placed 1 Km apart. What you see is:

A fall off in the construction of apartments the further you move from CBD and therefore an increas in T/Houses and homes but skewed up or down the coast to reflect water proximity.

You also see a similar variation in price.

Another broad maxim to consider is the more land, the better the capital gain. Apartments have the least land and therefore increase in value, other things being equal, at a slower rate than a home which has more land.

This can once again be seen on the concentric ring map and other things are seldom equal.

Regards

Ross
 
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