Melbourne - $350,000 - Buy or not?

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luca.321

Hi everyone.

I am new to the forum and investment property. Started renting out 5 years ago so I thought was the right time to start thinking to buy a property. My budget is really low, let`s say around $350,000. I am looking for an IP in Melbourne and repay the loan with the rent. I need to borrow around $270,000 which will make $1780/month @ 25 years.

I`ll be renting out another place.

Do you reckon it is a good plan? 25 years look a bit too much to me but it is the only way to make it. There is also the chance I`ll be relocating overseas within 5 years so that`s another reason to buy an IP.

Thank you all,
Luca
 
Speak to a broker, plenty on this forum and work out your true budget first. You will have more options than u think on 350k budget as long as you are willing to look. What type of property are u after and would u consider large regional areas like ballarat, bendigo, geelong, etc,
 
No idea yet. Well, Brunswick East, Essendon, but probably too expensive. Mainly Northern suburbs. Even Bundoora. I like other suburbs but too much expensive to find a unit. Open to everything as IP.
 
I have also been looking at melb suburbs with a similar budget around 400k. Considering Deer Park, Dallas, Cragieburn, Broadmeadows, Glenroy, Jacana, Epping etc.
Trying to decide on an older house or newer townhouse with better location.
 
luca.321 said:
Do you reckon it is a good plan? 25 years look a bit too much to me but it is the only way to make it. There is also the chance I`ll be relocating overseas within 5 years so that`s another reason to buy an IP.
Click to expand...

First off Luca, welcome to SS.

What and where to buy is dependent upon your chosen investment strategy.

You see property is merely the vehicle. The strategy is how you intend driving that vehicle.

Unfortunately the mistake I see newbies and sometimes not so newbies is that they are property focused instead of strategy focused which is like putting the cart before the horse.

Property investing is not about property rather about the strategy and the way you intend to use the vehicle to get to where you are wanting to go. No good buying a small shopping car if you intend driving interstate on a family holiday.

What strategy/s are best for you is determined by where you are wanting to go, the time frame you want to get there in and how hands on along the way you want to be - all based around your personal risk profile.

I hope this provides some food for thought.

What is your chosen investment strategy?
 
Hi Rick,

thanks for your reply. It is mainly for retirement purpose (let`s say 30 years time?!?!). I am from overseas and I think Melbourne will do well in the long term compared to other continents.

I`ll be renting out and if possible maybe within 10/15 years buy another property to live in.

Cheers,
Luca
 
Hello :)

Welcome to the forum.... buying your first place for investment or to live in can be daunting but the worst thing any one can do is nothing!!! So good to see you are looking at getting into the market.

At $350,000 there are some nice areas you can buy in but ask your self this:

What is your goal with the property? Just to buy a place, rent it out, pay some debt down and use the equity for another purchase?

If so maybe look at an older area with growth... the market is very hot in Melbourne, so make a plan of attack.

If you need anything more than happy to help :)
 
luca.321 said:
Hi Rick,

thanks for your reply. It is mainly for retirement purpose (let`s say 30 years time?!?!). I am from overseas and I think Melbourne will do well in the long term compared to other continents.

I`ll be renting out and if possible maybe within 10/15 years buy another property to live in.

Cheers,
Luca
Click to expand...

Luca,

Research around Braybrook, Sunshine, Albion, Ardeer, Deer Park - VERY underated (in my opinion) still compared to proximity to CBD and likely to keep growing in future.

Good Luck
 
littletee said:
Luca,

Research around Braybrook, Sunshine, Albion, Ardeer, Deer Park - VERY underated (in my opinion) still compared to proximity to CBD and likely to keep growing in future.

Good Luck
Click to expand...

I have to agree with the above!!! But the areas have been booming... A house last night sold in Deer Park for 425K with development opportunity.

Crazy!!!
 
If you want a one bedroom apartment (which take forever to sell) have a look at these.

http://www.realestate.com.au/property-unit-vic-albion-118396895

Has a tobacoo smell to it, but will get good rent. You just have to hope eventually the area will get more desirable, but unlikely to go down too much in price due to rent of around $200 a week it can get. Will get for under $150k

http://www.realestate.com.au/property-apartment-vic-sunshine-119123535

Saw this today. Has a massive bedroom. Bathroom is old but bathroom has laundry facilities in it (unlike the property listed above). Not in the best condition, but property is extremly cheap.

Problems with the above properties (and I think with the vast majority of 1 bedders) is that they are extremly hard to sell. The above properties have been on the market for ages. Yes ridley street has a bad reputation but to me it seems safee and is in a great location as it is very close to ammenities.

However I will say again 1 bedroom apartments are extremly hard to sell in my experience. Plenty can be made. 2 bedroom apartments are more desirable. Of course make sure there is a car park on title.
 
Last edited:
This property is interesting

http://www.realestate.com.au/property-house-vic-melton+south-119689343

Advantages of the above property.

1) It is a house on a large block that one day you should be able to subdivide
2) It is close to the railway station
3) It seems to be in great condition.

Disadvantges of property
1) It is in Melton. Plenty of land out that way that can be developed
2) It is in Melton, which is really a far way out. Ammenties probably not the best if you want to live in it.

If you are prepared to live out in Melton and work in the city this could be a good buy for the long term. Yes there is land to develop in Melton, but look how close this property is from the station (walking distance).

This is the type of property you could do very well out of in the long term due to the thact it is a house that is really close to the station and eventually amenties. Also eventually you should be able to develop (build two townshouses) Yield on property should be around 5% or more.

However there is a risk that it won't do much. However compared to apartment complexes near the city, I feel there is a better chance this property could outperfrm an apartment complex, due to the fact apartments are easier to build than a house.
 
pickle pickle said:
Try not to get a 1 bedroom apartment.
Click to expand...

IMHO, purchasing a 1 bedder will be shooting yourself in the foot from a financing ability perspective .

It will also come back and bite you later down the track in relation to CG exposure and being able to leverage forward into your next property to increase your asset base.
 
littletee said:
+1 for the above.

Sounds as though you have a lot of research to do Luca, with all due respect.
Click to expand...

Agree also..

Otherwise the other western subs mentioned a few posts a live have scope for growth, but I would be saving a bit more and targeting a house.
Footscray unit market is different to that other a bit further out.
Markets within markets.

I think for 350 a 1970's single story unit, 4 or 5 on the block type in Oak park would be good buying. Townhouses a plenty for 450-500k but older 2 br unit with scope to renovate, 15-20 mins from cbd close to train station is good buying for 350. Plus nicer area than sunshine etc if your budget cannot go past 350k...
 
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