IP in Hoppers Crossing/Werribee (VIC)

[sash]

DeeHwa,

Last I looked .....you have only managed to buy one property....and the icing on the cake is with your parents money.

So you work in the construction industry....you will know very well that new houses in Caroline Springs, Point Cook have gone up very little. The thing is "grass hopper" there are sub markets in markets ....like older houses in Werribee and Hoppers Crossing...now there is lies the issue....older houses have a lot of land content. So the story goes like this.....one upon a time in 2006....land was selling for about 90-100K for a 550sqm block today in 2009 land in the area if you can find one near infrastructure sells for 150-160K. So your assumption I bought houses at 280-300k is premature....I bought between 130-170 and they are worth between 220-280k but across my portfolio the stuff I have averages 280-300k.

In case you are telling me that I am anti-inner city I am not.....just don't want my $52K positive CF compromised by large negative gearing hits. That comes in whether I go to work or not. Hmmm....CF must really be bad ....no growth....of wait ....the average appreciation rate across the portfolio is about 9.5% per annum.

Now back to original question.....what pearls of wisdon can you offer? I look forward to hearing about your portfolio.

Happy to share mine ...... properties in double digits spread over SA, NSW, VIC, QLD....with lowish LVR of about 37%. The rents on these are still growing on average of approximatelty 10% per annum.

As to the Wyndham region...well, it is no different to any other community based development like Caroline Springs, Sanctuary Lakes, Point Cook...(potentially even worst given it is even further out) and I know these areas in utmost detail because I work in the construction industry.

Btw, not that you realised it, but you have just validated what we have said all along about inner city. 'A couple of years ago yes....now it is more difficult' you said...hahaha, which begs the question why you didn't buy inner city but instead, decided to buy double digit houses which are worth $280-300K each. As you should know, it is capital growth which creates wealthy investors, not yields. You can argue this as much as you can, and I am sure many people do, but I'd think it is pretty obvious who is really laughing.

 

[JIT]

As to me, well...yes, my parents did give me money.

Well your parents have done very well then.

As for you...

Let's say you never got such an advantage, and based on your own income at present, and savings (if any), what could you actually afford to buy on your own two feet today (if anything)?

Thanks.

 

[DeeHwa]

Oh no , I get the point

And who ever mentioned that Werribee would "Beat" inner city property? Not me sunshine. You might want to clean your compute screen, oh, im sorry, would you get your butler to do it?.

I do not and have never claimed that Werribee or the surrounding areas are the be all and end all of areas for IP, far from. What my point is, is that it can help a lot of people achieve their property investment goals and does not deserve the bad wrap it gets.

You are welcome to an opinion and I am the first person to discuss anything that can be discussed with an open mind and with a little respect, however, the comments you are making show your character and class... Or lack there of... and quite frankly, your comments are a little insulting.

Cheers

Mick

hum...that is kinda weird. You'd rather invest in Werribee (and in fact buy a house there) rather than inner city, even though you admit (or imply) that it doesn't beat inner city. That is a funny investment strategy. Look, I accept the argument that buying 'cheap' gets people to achieve their investment goals. However, I disagree that Werribee is a good investment because there are a plethora of superior investments, as I have vehemently pushed all along. Sure, it achieves capital growth, but with $300K to spend as an arbitrary figure, can you buy elsewhere and do better? I am sure you can think of plenty as history has shown.

So why exactly does Werribee not deserve its bad rap? People think the way they think for a reason, and if the majority bags it, then it is not a matter of whether it is true or not as majority are always the judge.

It was never my intention to insult anyone, if that is what you think I am trying to achieve. All I am trying to justify is that one could have been wealthier had they made alternative investment decisions 20 years ago, or 10 years ago or even 5 years ago using the same amount of money to buy inner city (could be a small attached house, small flat etc...if that is all you could afford) or inner east. Remember, in 1999, the average Toorak house was mid $700K's, the average Brunswick house was a tad under $200K's. Imagine Sash land banking $700K in 1999 in a Toorak mansion (he would have been 32, given he is 42 now - as mentioned in previous post) and now the average is about $3mil. Assume for arguments sake that Sash has 10 houses each worth $300K = $3mil current. That one Toorak house = 10 of Sash's houses. Rent is not really part of the equation because average Toorak mansion house rent is around $1,600 and average Werribee rent is around $200 so in comparison, it is $400 per week difference although you would assume management fees, maintenance, opportunity cost and time value to eat most of that up. Oh...if that Toorak mansion was a PPOR, then there is no capital gains tax, yet Sash would be hit on at least 9 of the houses...

Look...Sash makes it out to be well off (if $3mil is your benchmark) and it would be fair to say someone like Sash had $700K to play with in 1999. Would he have done better buying a Toorak mansion? I would definitely say so...

And I haven't even mentioned using a Toorak mansion as security for further investments, drawing out equity for reinvestment, social premium, value adding etc.

 

[MCS_80]

I appreciate the reply DeeHwa.

As we have all demonstrated here, there are many different ways to succeed with Investment property. There is no one "right" or "best" way, it all depends on each individuals goals, budget and mind set at the end of the day.

The reason I believe Werribee does not deserve the bad wrap is because I live here and own property here because I want to. There is potential in the area if/when the population wake up and become a little more aware of their responsibility and contribute a more to the community. I am the first to admit the area has its "Riff Raff" and cant wait to see the day the area becomes too expensive for them to rent/buy/live here.

I have put together a clean up Werribee plan which includes tracking and cleaning notorious graffiti sites, this wont turn Werribee into Toorak, but from little things big things grow and the people who really love the area need to get behind the town a lot more and help "clean it up" and turn it into the place people want to come to and leave with a great memory.

Can we turn an "Ugly Duckling" into a "Swan"?, only time will tell I guess.

Cheers

Mick

 

[DeeHwa]

Well your parents have done very well then.

As for you...

Let's say you never got such an advantage, and based on your own income at present, and savings (if any), what could you actually afford to buy on your own two feet today (if anything)?

Thanks.

Getting a helping hand from parents is a moral issue, not an investment issue. One still needs to know how to utilise the money and I could have easily went and bought 2-3 Werribee houses (depending on how much they cost) but I choose not to because I felt buying a Brunswick house is a more superior investment (only time will tell, although history is on my side).

As to your next query, had I relied on my own two feet...I would at least be able to afford an average house in Preston or Burwood or Footscray. However, I don't know how this is relevant to anything...just answering it to address your curiosity.

 

[MCS_80]

average Toorak mansion house rent is around $1,600 and average Werribee rent is around $200 so in comparison, it is $400 per week

$1,600 per week for rent in Toorak, and $200 a week in Werribee. $1,400 in my math.

Unless you mean $600 a week in Toorak?

Cheers

Mick

 

[DeeHwa]

I appreciate the reply DeeHwa.

As we have all demonstrated here, there are many different ways to succeed with Investment property. There is no one "right" or "best" way, it all depends on each individuals goals, budget and mind set at the end of the day.

The reason I believe Werribee does not deserve the bad wrap is because I live here and own property here because I want to. There is potential in the area if/when the population wake up and become a little more aware of their responsibility and contribute a more to the community. I am the first to admit the area has its "Riff Raff" and cant wait to see the day the area becomes too expensive for them to rent/buy/live here.

I have put together a clean up Werribee plan which includes tracking and cleaning notorious graffiti sites, this wont turn Werribee into Toorak, but from little things big things grow and the people who really love the area need to get behind the town a lot more and help "clean it up" and turn it into the place people want to come to and leave with a great memory.

Can we turn an "Ugly Duckling" into a "Swan"?, only time will tell I guess.

Cheers

Mick

I generally agree with your comments Mick and it is good to see you are 'trying' to make a difference. Putting up a clean up Werribee plan is impressive, and despite my own personal opinion that it could end up as a futile exercise, I guess at the end of the day, someone out there has got to take the first step and try. Indeed, Rome was not built in a day.

I acknowledge that it is often a hard exercise to simply classify investing as a 'best and right' way. However, all along, I have only tried (often to blind ears) that there has been proven 'more superior' investments based on money, and in most cases, money is the only tangible measure of performance. As you have seen, I have pushed my case with mathematics, anecdotes, history and facts but as expected, it would always end up in a stalemate regardless of how convincing or correct my arguments are because as humans, we are born stubborn and there is too much at stake here (especially with my parents and I buying and overloading in inner city and Sash overloading in outer west). It is natural we defend our investments to the nth degree. Sure, past performance is not always an indication of future performance and I understand this, but it is in my youthful opinion that past performance provides great guidance for future performance. We will just have to see to that!

 

[DeeHwa]

$1,600 per week for rent in Toorak, and $200 a week in Werribee. $1,400 in my math.

Unless you mean $600 a week in Toorak?

Cheers

Mick

what?

$1,600 per week rent in Toorak mansion
$200 per week average Werribee house rent x 10 houses = $2,000

Hence the $400 per week difference

 

[MCS_80]

what?

$1,600 per week rent in Toorak mansion
$200 per week average Werribee house rent x 10 houses = $2,000

Hence the $400 per week difference

Ah yes, I thought you were comparing it 1:1.

Cheers

Mick

 

[Deltaberry]

See responses below....

Hah love your cheap shots about a minor error in subtraction.

To be honest your whole argument fell on your own assumptions & numbers. I never made one assumption. They were all based off your numbers. You were the one who told us your properties are worth 700k now. And you're the one who told us it'll be worth 815k in 2012. So that's 115k profit even if I assume 0 stamp duty.

So on that basis the answer to your original question (ie can I do better than 190k profit by investing in Werribie), I would've thought the answer was no using your numbers.

And honestly, stop with those cheap shots such as "is that sign for not having done [ie invested in] anything?". They sure are low ball comments coming from a 42 year old. I have nothing to prove by stating what I own, what I have, how much I earn, on an internet forum. If you feel your ego is threatened because I used your numbers to demonstrate how your whole analysis is flawed, then I apologise for that. But my only advice would be to use that thinking cap before you type then.

As for your profit of 245k or whatever you said it was between 2006 and 200, well good on you. Making around 80k per year is definitely something to be proud of if you're 25 years old. If you hadn't disclosed your age, I would've congratulated you. But that doesn't change the fact that on your numbers, you'll only make another 115k profit at most between now and 2012.

Edit: Oh and yes, admittedly I took a few cheap shots at your age etc, but I'm just keeping the playing field in the low level you've brought it to

 

[sash]

Ah yes....the numbers.......I will bow in deference to your wisdom. I guess you are right numbers are an after thought in property.....

You certainly have a lot of wisdom at such a young age........certainly shown by your ability to come onto to national property forum and tell it like it is about Melbourne inner city property.

Best of luck on your future endeavours!

As for your profit of 245k or whatever you said it was between 2006 and 200, well good on you. Making around 80k per year is definitely something to be proud of if you're 25 years old. If you hadn't disclosed your age, I would've congratulated you. But that doesn't change the fact that on your numbers, you'll only make another 115k profit at most between now and 2012.

 

[Deltaberry]

You are welcome to an opinion and I am the first person to discuss anything that can be discussed with an open mind and with a little respect, however, the comments you are making show your character and class... Or lack there of... and quite frankly, your comments are a little insulting.

I must say you've been fairly reasonable all along in your comments and even up to this point they still are.

But I don't understand how he is insulting anyone. He's commenting on a suburb generally, unlike some other people who continually try to insinuate that they are 'better' than others because they made a whopping 245k over 3 years (in fact over 2 property 'leg-ups' - one in 2007 and one in 2009). Also it shows the lack of class/character when one make groundless assertions that some of us have never invested or have no investments in order to bolster their arguments. It's what a 15 year old would do on an internet forum but obviously many adults still behave like one.

 

[Deltaberry]

Ah yes....the numbers.......I will bow in deference to your wisdom. I guess you are right numbers are an after thought in property.....

You certainly have a lot of wisdom at such a young age........certainly shown by your ability to come onto to national property forum and tell it like it is about Melbourne inner city property.

Best of luck on your future endeavours!

It's ok, my wisdom is built on the foundation of your numbers, so thanks for the assumptions.

Oh and yet another wild assumption about my age too. Keep the low ball effort up.

Good luck in your future endeavours too.

Edit: Sash, I forgot to point out another issue in your calc. In your original calc, your properties are positively geared because you have a lower gearing on them as you've had the advantage of sitting on them through a 2007 and 2009 leg-up.

The 650k inner city property would also be positively geared if purchased in 2006 because it would also have only costed 450k or so back then. So honestly, what you're doing is like comparing apples and something a lot more different than oranges, say like... hmmm..... elephants.

 

[Deltaberry]

As we have all demonstrated here, there are many different ways to succeed with Investment property. There is no one "right" or "best" way, it all depends on each individuals goals, budget and mind set at the end of the day.

If you read my earlier posts, that's what I said.

But obviously some have the propensity to become very defensive when others' investment strategy is not the same as theirs and this leads to ill-fated attempts at demonstrating how their investment is far superior numerically.

 

[MCS_80]

If you read my earlier posts, that's what I said.

But obviously some have the propensity to become very defensive when others' investment strategy is not the same as theirs and this leads to ill-fated attempts at demonstrating how their investment is far superior numerically.

Yep. I’ve read all your posts and everyone else’s here also.

And nah, im not defensive because someone else has a different investment strategy to mine, heck, I plan on buying IP's all over Australia and hope to one day include the upper class suburbs also.

I am "defensive" because, in my opinion, I believe that Werribee does not deserve to be called a "Dump" or deserve the bad wrap it gets. I am defending my opinion, that’s all.

Cheers

Mick

 

[Deltaberry]

And nah, im not defensive because someone else has a different investment strategy to mine

Nahhh I wasn't talking about you specifically

 

[MCS_80]

Nahhh I wasn't talking about you specifically

*High Fives* Deltaberry

No wuckas duckas.

Cheers

Mick

 

[mysterious_guy]

I think some people have turned my question to a totally different debate.
Although i do agree that house prices in east are likely to increase more than western suburbs but what can you buy in eastern suburbs for under $300 k???
I have never considered buying a unit and probably never will so what sort of house would you get for $300k in inner city or eastern suburbs???(I think i know the answer).

 

[MelbGal]

I cant really comment too much about the area, but I used to live in Pt Cook which was nearby and found it was great. There were lots of white collar professionals moving to the area as well as people upselling from Hoppers, Altona and other nearby areas.

 

[EGB18CT]

Lands up for release now at the Werribee Marina, sees rather pricey coastal fronting land from like 769k house and land from 1.37M!, then mid 400's for a few metres from water/marina and 'opportunity water views'/ 800k for house and land and regular land from around 279k.

Looks promising, but what about the prices for this new land - is it too high? and how will this now impact the regular Werribee/Hoppers?