Thanks Beanie Girl! We'll have a look into it.
We've always been biased to the south and east having grown up around here so we are quite oblivious to other potential suburbs on the north and west. Appreciate the suggestion
Investment Advice Needed - Melbourne
- Thread starter DinoJess
- Start date
Thanks Beanie Girl! We'll have a look into it.
We've always been biased to the south and east having grown up around here so we are quite oblivious to other potential suburbs on the north and west. Appreciate the suggestion
All great areas. Close to good public transport, there's a major shopping and business hub nearby and there's good schools in the area. It's very much suburbia, generally fairly quiet, nice place to live. I expect capital growth will be reasonably good over the long run.
The rental yields in these areas are terrible though but that could be said of most of Melbourne at the moment.
I think many areas of the Melbourne East will stand the test of time as good locations, but right now, I think there's other locations (regional and interstate) that make more immediate sense for investing.
Hi Peter,
Thanks for the advice! Good stuff. Ringwood does appeal to us, it is really a nice area and plenty of developments going on that you would think would add to capital gains over time. Certain parts of Ringwood North and Heathmont even return decent rental yields. If we could get around $500 a week return we would be in a fairly good position I would think.
I have been reading that interstate locations such as Brisbane, Gold Coast and even Newcastle are good options right now. With Sydney being so overpriced there's an expected move north and QLD particularly seems to be quite popular with international investors from what I'm gathering. I am looking a bit more into Brisbane as a possible option. Regional VIC doesn't really appeal to me at the moment.
Would love to hear more people's thoughts on the Australian market as a whole as well as Melbourne locations.
Thanks!
You currently hold two properties. Is one of them your home?
Will you be using equity to 100% finance your investment purchase?
What LVR will this bring your other properties to?
You've not had any experience with sub-divs. Have you experience with building?
On a scale of 1-10 how would you rate your understanding of the sub-div process?
Before I offer my opinion please bear in mind this is a purely general post as I've no information about your financial standpoint. I also expect that you'll disagree with this reply somewhat, to which I apologise for any disappointment.
My advice for you would be to build a solid capital growth base for your portfolio before embarking on projects.
What I mean by this is purchasing several properties that are likely to reliably give you equity growth whilst being less susceptible to short/mid term market fluctuations. If you're set on putting in some work, doing renovations is a much easier and less risky option than a full build.
This way you have the capacity to absorb any mistakes or financial pitfalls when it comes to risky strategies such as sub-division and building. The reason why I say risky is simply that there are many more things that can go wrong when you're looking to cut up land and build a property when compared to purchasing an existing property with a proven track record.
I've seen investors jump straight into developing and sometimes it works brilliantly whilst other times it falls over and they're stuck with a building site eating away at their disposable income.
Real Estate is a long term game so take it slow, play it right and look to minimise risk at every turn.
Thanks Jake! That's some great advice.
To answer your questions:
One of them is our home.
We are on a 80% LVR through our lender to fund the purchase.
Our debt after this loan will total $1.126 million across the 3 properties.
Our current total available equity is $406,000 across our existing properties. We also have an additional $30,000 deposit to put toward the new purchase.
We haven't had any building experience either but figure you have to start somewhere. I would rate our understanding of the sub-div process at a 5.
Yes there's no doubt we are new to the whole sub-div concept but the plan was not to jump straight into it but rather purchase a property that has the potential to develop down the track. I would say it would be minimum a year at least before we even started to put the wheels in motion thus allowing us time to 1) build up some equity and 2) conduct the necessary research. It's even possible we may change our minds and not go down that track. Nonetheless having a nice large block won't hurt our CG over time.
We are definitely looking to buy something that we can do some minor renovations on as well to help speed along the capital growth in the short term. We're not after a jaw-dropping beauty of a home, just an average place with plenty of room for improvement and room to develop if need be.
Here's a question to get some conversation flowing:
If you had $700k to invest into the property game, what would you do with it and why? (Without getting too caught up on the financial details).
Frankston
can't buy a garage in Sydney for $300k
Yep Sydney is a joke at the moment!
Speaking of Frankston, are there any new developments coming up in the next couple of years that anyone is aware of? The area hasn't really done much over the past 3-5 years in terms of capital gain. Had a look at a few options out that way and it seems like $350-400k is the likely entry price for something on a 600sqm+ block. With rentals around $320 a week it doesn't seem too bad an option in terms of interest expenses to rental income difference.
What are people's thoughts on the area?
