Melbourne - Eastern Suburbs

[seano87]

Hi all,

I have a maximum of 450k for my first home. I'd like to live in it for 4-5 years before buying my next house and renting this first one out.

After the suggestions of others on whether I should buy a unit/house in the suburbs (Bayswater, Ringwood, Ferntree Gully area) or a 2 bedroom apartment in an area like Hawthorn, Burwood, Camberwell etc.

Is it difficult to get a tennant out in the suburbs? I understand it would be easier closer to the city, but looking at the annual property prices growth of Hawthorn for example (here), I'm a little worried about that option.

Any suggestions would be great.

Thanks
Sean

 

[LoneWolf]

Hi all,

I have a maximum of 450k for my first home. I'd like to live in it for 4-5 years before buying my next house and renting this first one out.

After the suggestions of others on whether I should buy a unit/house in the suburbs (Bayswater, Ringwood, Ferntree Gully area) or a 2 bedroom apartment in an area like Hawthorn, Burwood, Camberwell etc.

Is it difficult to get a tennant out in the suburbs? I understand it would be easier closer to the city, but looking at the annual property prices growth of Hawthorn for example (here), I'm a little worried about that option.

Any suggestions would be great.

Thanks
Sean

Personally, I've never had any problems renting out IP's in the outer east surburbs

 

[Jake Milne]

It's important you factor in a suburbs vacancy rate when purchasing.
To find out what that is go here and enter in the suburb you're looking at.

Melbourne's average vacancy is around 3%, or 3 in every 100 investment properties is vacant at any given time. If a suburb is less than that amount it's a good indicator that finding tenants shouldn't really be an issue. Even so factor in a 4-8 week period of vacancy in your budget; in other words only count on 44-48 weeks worth of rent.

Secondly, when looking at capital growth it's best to get statistics from sources such as: Australian Property Monitors, Residex and RP Data.

This information is readily available in the back section of different investor magazines such as API, SPI, and YIP

Look at the long term trends more so than the yearly trend.

 

[Lil Skater]

Not hard if the property is well presented and priced correctly. As in most cases.

 

[seano87]

Thanks for the advise, useful information here!

 

[K_Raheja]

Hi all,

I have a maximum of 450k for my first home. I'd like to live in it for 4-5 years before buying my next house and renting this first one out.

After the suggestions of others on whether I should buy a unit/house in the suburbs (Bayswater, Ringwood, Ferntree Gully area) or a 2 bedroom apartment in an area like Hawthorn, Burwood, Camberwell etc.

Is it difficult to get a tennant out in the suburbs? I understand it would be easier closer to the city, but looking at the annual property prices growth of Hawthorn for example (here), I'm a little worried about that option.

Any suggestions would be great.

Thanks
Sean

I would recommend outer east suburbs - house with some land..would give you option to subdivide in future.

SQM research has vacancy rate...but nothing beats calling local agents and actually going to that suburb.

I also went to the train station after work for few days to 'check' out the local crowd and get a 'feel' before i bought my PPOR in bayswater.

btw,Lots of subdivisions have been approved by the local council around here .

good luck.

 

[Nigel Kibel]

I think what you have to consider is the property itself. If its an apartment does it have character, can it be improved.

Also very important, how close is it to shops and public transport.

In many cases inner city apartments may attract better tenants and still provide capital growth.

However there is nothing wrong with Ferntree Gully. But again it depends on shops public transport and whether the block has development potential.

 

[Domma35]

It's important you factor in a suburbs vacancy rate when purchasing.
To find out what that is go here and enter in the suburb you're looking at.

Melbourne's average vacancy is around 3%, or 3 in every 100 investment properties is vacant at any given time. If a suburb is less than that amount it's a good indicator that finding tenants shouldn't really be an issue. Even so factor in a 4-8 week period of vacancy in your budget; in other words only count on 44-48 weeks worth of rent.

Secondly, when looking at capital growth it's best to get statistics from sources such as: Australian Property Monitors, Residex and RP Data.

This information is readily available in the back section of different investor magazines such as API, SPI, and YIP

Look at the long term trends more so than the yearly trend.

Jake, really good info here.

Stupid question: when you look at the vacancy rates on that site, is it more important to look at the average vacancy rate or the number of vacancies in the past few months/years?

Cheers
Dom

 

[Domma35]

I would recommend outer east suburbs - house with some land..would give you option to subdivide in future.

SQM research has vacancy rate...but nothing beats calling local agents and actually going to that suburb.

I also went to the train station after work for few days to 'check' out the local crowd and get a 'feel' before i bought my PPOR in bayswater.

btw,Lots of subdivisions have been approved by the local council around here .

good luck.

Raheja, this is exactly what I'm considering doing. Buying a place in the Eastern suburbs, leasing it for 12 months, subdividing and selling.

Any preferences between Doncaster, Ringwood, Mitcham, Donvale, Blackburn or Templestowe? Any others?

 

[Jake Milne]

Jake, really good info here.

Stupid question: when you look at the vacancy rates on that site, is it more important to look at the average vacancy rate or the number of vacancies in the past few months/years?

Cheers
Dom

Hi Domma,

It's best to scroll to the right and look at the overall percentage

 

[Angel]

You will see from the graph which months have the highest vacancy rate and you can plan leases accordingly.