Looking to invest in Melton Vic

Hi Guys,

Its my first post on the forum and looking for some expert advice in terms of my first investment property.

I am based in Sydney and looking to invest in Melton Vic, a few of my friends already have invested and reckons its a good area to invest in.

The question is whether to go for a home and land package like they did or should I go for a more older houses with bigger land area close to Melton city center.

Home and land package - $325 to $340K with rent of about $300 per week

Older house with bigger land area also comes to around $340-$350 K but rent is about $260-$270

With rent yield either option will not be cash positive in the short to medium term.

I am just guessing that if i go with bigger land area I would have option to subdivide and get better capital growth.

Seeking advice from seasoned pros here to help me buy my first investment property.
 
Hey Wentyboy,

Welcome to the SS community. Good on you for coming him here and asking questions, your already ahead of 85% of property investors:)

I'm also glad you came on here to ask about Melton because honestly if you purchasd there IMO you would be making a horrible investment decision that would severely halt your investment journey.
First question I need to ask is why do your friends think Melton makes sense for a good investment? Yes there is some cashflow to be had but the growth propsects are almost non existent. I think you summed it up in your question when you talked about house and land packages.
 
In my opinion, stay away from Melton - I lived there for 5 years so fairly familiar with the area.

There's too much land between Caroline Springs and Melton yet to be filled that will keep a cap on the prices for the foreseeable future. It has the bogan stigma attached to it and even though there's been a bit of development in don't see it gentrifying in a hurry as the fundamentals aren't really there. Maybe if the rail electrification ever happens that might give it a bit of a kick but as far as I'm aware there's no date for that yet.

What made you pick Melton?
 
In my opinion, stay away from Melton - I lived there for 5 years so fairly familiar with the area.

There's too much land between Caroline Springs and Melton yet to be filled that will keep a cap on the prices for the foreseeable future. It has the bogan stigma attached to it and even though there's been a bit of development in don't see it gentrifying in a hurry as the fundamentals aren't really there. Maybe if the rail electrification ever happens that might give it a bit of a kick but as far as I'm aware there's no date for that yet.

What made you pick Melton?

+1 above. Is our version of your Campbelltown. Much better value elsewhere close to the City if you can spend another $50k or so.
 
My guess on the pick of Melton is that it is cheap. Most of Melton I don't see potential, however Melton South that is at max a 20 minute walk from the station, I see potential.

I understand peoples concerns on land development there and I agree it applies to most of Melton, however I look at Melton South on real estate .com and google map properties i see from the train station, look at prices of cheaper properties in places like Ballarat and Bendigo and I see a quick 20 to 25% gain on the fundementals I see.

I haven't put my foot on the ground in Melton South yet so once I'm there I might see why prices are so low, but to get at least 5% yield on a house on a property that rents for less than $250 a week (selling for low $200,000) I just see a quick spike in prices.

Please tear my points to pieces regarding Melton South properties being a 20 minute walk from the station. If I'm wrong, which I believe most people here do believe, I want to be convinced that I'm wrong before I invest in the area.
 
+1 above. Is our version of your Campbelltown. Much better value elsewhere close to the City if you can spend another $50k or so.

I don't know Cambelltown, but please show me where in Melbourne where I can spend 50k more on a house that has more potential than Melton South? I just don't see it.
 
I have to agree with Albanga and Kinnon Bell - My first IP was in Brookfield, a suburb just next to Melton, and I regret having it as my first investment. My money would have been better spent elsewhere but I've learnt a lot of things with my Brookfield property. Imo, it has strong growth prospects for the very long term. Short to medium term, I don't see much.

Feel free to PM me if you have any specific questions about the area. :)
 
Please don't compare Melton to Campbelltown. Campbelltown has hospitals, a university and a huge shopping centre with a good train line and access to many jobs and not far from m5 which will get you to the city in no time.. Melton is more like Appin, except Appin is between the beautiful Southcoast beaches and Campbelltown.. Melton is in the middle of nowhere.. There are many western suburbs 20km closer and slightly more expensive..
 
Just curious - how does Melton fare in the Melbourne 2050 plan?

I wish it was the equivalent of the next Mt Druitt, Tregear, and Sydney suburbs that took off in recent years. Unfortunately I don't see it happening.

It has the potential to be a great satellite city and always has - but there is a lack of vision from those who get to make the decisions and hand out the money. Plenty of new housing developments and forthcoming new schools but where is the employment?
 
I have to agree with Albanga and Kinnon Bell - My first IP was in Brookfield, a suburb just next to Melton, and I regret having it as my first investment. My money would have been better spent elsewhere but I've learnt a lot of things with my Brookfield property. Imo, it has strong growth prospects for the very long term. Short to medium term, I don't see much.

Feel free to PM me if you have any specific questions about the area. :)

Ha Ha - I like how you have distinguished Brookfield as somewhat separate to Melton. When I was a kid, Brookfield, was the name on the entrance to one of many new housing estates that existed, just like Kurunjang - which I believe is now also considered a suburb.
 
It has the potential to be a great satellite city and always has - but there is a lack of vision from those who get to make the decisions and hand out the money. Plenty of new housing developments and forthcoming new schools but where is the employment?

Good question.

Of all the outer suburbs, residents of Melton are more likely to work outside their municipality than anyone else. And because of the nothingness, driving distances are much further. The likes of Berwick is also a long way out but there's more continuous development and stronger employment in (say) the Monash area.

Toolern is the planned major centre for the area, but is very long term.

In the 1960s one could assume that they would build new tertiary educational facilities in (then) outer suburbs. Many were converted to universities in the 1980s. The surrounding suburbs are now respectably priced areas.

But the most recent trend is universities closing down or offloading their outer suburban campuses, even that's where the people are. Overseas students are the big market and they don't fancy living in the likes of Sunbury, Melton or Churchill.

You also can't necessarily rely on big government departments either to move. Yes some are moving to Geelong, but there seems to be a political imperative to do something for them given Ford's closure. Canberra has pretty much abandoned this approach as well.

The big employment areas in the west are the Laverton North industrial area and around the airport. Plus a bit in Footscray, Sunshine and around the big shopping centres. All a fair way from Melton.

Apart from the continual expansion of Woodgrove (which is a monopoly centre without nearby competition), I can't see a lot of jobs growth for Melton beyond service industries for the local population.

Possibly countervailing this might be lifestyle benefits due to the surrounding environment (notably amongst those who live on hobby farms, in the hills or near the beach) but I have yet to see Melton's attraction here.

I'd define Brookfield and the like as suburbs of Melton, not suburbs of Melbourne. It is tied to Melton's fortunes and almost all its shopping, transport and other services are the same as used by Melton people.
 
Hi Guys,

Its my first post on the forum and looking for some expert advice in terms of my first investment property.

I am based in Sydney and looking to invest in Melton Vic, a few of my friends already have invested and reckons its a good area to invest in.

The question is whether to go for a home and land package like they did or should I go for a more older houses with bigger land area close to Melton city center.

Home and land package - $325 to $340K with rent of about $300 per week

Older house with bigger land area also comes to around $340-$350 K but rent is about $260-$270

With rent yield either option will not be cash positive in the short to medium term.

I am just guessing that if i go with bigger land area I would have option to subdivide and get better capital growth.

Seeking advice from seasoned pros here to help me buy my first investment property.

If it were me I'd be heading north to Brisbane and surrounds, not south to Melton.
 
Spider-man I am gob smacked that toolern is a proposed major centre long term. Last time I was out that way there was a milk bar, a hall and a lot of paddocks.

I may be wrong but I believe vic uni didn't fare well in melton south either - not sure if it did shut down.

Did anyone see the insight segment on shepparton? Similar scenario a lot of people having to go outside the area for uni and jobs.
 
Spider-man I am gob smacked that toolern is a proposed major centre long term. Last time I was out that way there was a milk bar, a hall and a lot of paddocks.

I may be wrong but I believe vic uni didn't fare well in melton south either - not sure if it did shut down.

Yep. There's about 9km of emptiness between Caroline Springs and Melton. Make that 8km when Plumpton is built. The only things going for the area are freeway access and trains (fast but infrequent V/Line).

Governments aren't putting as many resources into new areas as the population would warrant. And where they have, the City of Wyndham (ie Werribee etc) has been greatly favoured over Melton for the last 5 - 10 years. Eg Suzanne Cory High School, new schools in Point Cook, Regional Rail Link and revamped buses, Werribee Employment Precinct, Mercy Hospital upgrades etc. Both have bad health and social statistics (eg obesity, school drop-out rates & domestic violence) but Melton seems slightly worse than Wyndham.

The weight of numbers will ensure that Melton/Toolern eventually must get some improvements. The most obvious needs include rail electrification, some new stations, a large hospital (currently Melton doesn't have a public hospital and its nearest is Bacchus Marsh) and ideally better tertiary education choice (It looks like VU have downgraded Melton to a vocational school http://www.vu.edu.au/campuses-services/our-campuses/melton ).

PTV's Rail Network Development Plan includes some projects for Melton - firstly track duplication, a new station for Toolern and electrification in about 15 years. http://ptv.vic.gov.au/about-ptv/ptv-data-and-reports/network-development-plan-metropolitan-rail/ These is currently unfunded and require politicians to commit funds.

If you're into very long term investing, and have faith that the long-term Melbourne population projections (ie reaching 8 million) will occur, Melton could be a reasonable proposition. Especially if buying land and you can withstand the opportunity cost of an income-less asset for years. But otherwise it might be worth holding off until about 2025 when we have a better idea of future projects and employment and areas closer in have been built out.
 
I've done quite well out of Melton, but I'm feeling very depressed now after reading this thread .... :(

A lot of what has been said above is fair and it can be difficult to find good tenants, but I still believe in the location as a long term hold. At the time I bought you could buy older established properties in central Melton for around $150k-$160k.

Like others have said, ... if you can afford to borrow more, then maybe look in Melbourne suburbs.

Mystery
 
Mystery there will always be some people that melton has served well. I was raised in melton and it takes decades for progress - the deer park bypass comes to mind.
Parents sold a 3bed bv on 580sqm 500m from the station in '89 for 70k. 2006 these were around the 160k mark and today similar stock is 230k. A 160k increase over a 26 year period isn't very good. A relative with a property Central shows similar numbers.
In terms of the train - I still remember my parents driving to Albion, parking and getting the train to work from there due to infrequent trains and lack of seats and that was over 30 years ago.

The hospital closed when I was in primary school - yes we had to go to bm. The biggest development when I was a child was the building and opening of mcdonalds. Now there is three.

Most recently there is tabcorp park - which you can see for miles when lit up and the pretty new library.
There is nothing there for tourists either. The rates in melton are quite high, the developers are now responsible for putting in roads. Where is the council putting the money?

Melton sits an almost equal drive to ballarat, melbourne, geelong and bendigo - it could be a regional (I don't consider it a suburb of melbourne) melbourne fringe employment hub. The question is what kind of jobs?
 
Hi

Hi,

Melton is a 100% no go... There is to much vacant land in the area and honestly the amount of distressed mortgagors in the area is not funny.

It sounds cheap on paper and yes sounds good but seriously stay away :)
 
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