Melbourne Hot Spots - Outer Melbourne

Nick said:
Clearly you haven't spent enough time visiting Frankston. Best beaches in Melbourne, capital of the Mornington Peninsula, train line, uni, TAFE, large shopping centre, great cycling routes to city along Beach Rd or Bay Trail, great new freeway access (and soon to be bypass), potential marina development.

As I see it, the stigma with the name is the only thing keeping it affordable. Robberies, violence, police call outs etc...have dropped sharply since 2006. Of the times i've spent in Frankston (including eating out) i have never felt unsafe or encountered any antisocial behaviour.

There are outer suburbs of Melbourne i wouldn't visit in a bullet proof vest. Frankston is one I gladly visit in thongs and boardies.
Click to expand...

Actually I only buy in places where potential buyers don't get turned off by the stigma. That way I access:

a) All buyers in the market
b) All buyers in the market with good money

Key thing to remember is - people with money don't buy in areas with a bad reputation. Do you see successful businessmen live in Frankston? Always follow the rich.
 
Wunderbar said:
Actually I only buy in places where potential buyers don't get turned off by the stigma. That way I access:

a) All buyers in the market
b) All buyers in the market with good money

Key thing to remember is - people with money don't buy in areas with a bad reputation. Do you see successful businessmen live in Frankston? Always follow the rich.
Click to expand...

I only have one IP in Frankston (south) so I have no real basis for or against it. It has been a great performer (up 50% in three years since purchase) but have doubts next 2-3 years of much growth. I do know area very well though.

As for Stigma, what about St Kilda, Richmond, Brunswick, Footscray and many more, times change. 10-20 years ago they were places to avoid.

As for successful businessman, i would say many live in Frankston South and especially on Olivers Hill.

I know many that have retired at 45 or below with assets $5-$10m, not super rich by any means but successful none the less.

I won't be buying anything else in Funky Town in the foreseeable future so in a way I agree with your consensus but not the logic used to arrive there.

Cheers BT
 
Wunderbar said:
people with money don't buy in areas with a bad reputation.
Click to expand...

I know several wealthy people, contrarians, who buy in mispriced places like Frankston. One person I know - I estimate his net worth to be around $7m excluding PPOR- raised a lot of eyebrows when he bought several delapidated but rentable old homes in Frankston North barely 3 yrs ago for around $170,000. These same houses are now selling for close to $300,000. Not a bad gain is it? He tells me he isn't selling anytime soon. He is fully geared and the rents cover most of his costs. He plans to raze the old shacks and rebuild townhouses......the whole suburb is ripe for redevelopment, according to the council.
 
annie lumen said:
I know several wealthy people, contrarians, who buy in mispriced places like Frankston. One person I know - I estimate his net worth to be around $7m excluding PPOR- raised a lot of eyebrows when he bought several delapidated but rentable old homes in Frankston North barely 3 yrs ago for around $170,000. These same houses are now selling for close to $300,000. Not a bad gain is it? He tells me he isn't selling anytime soon. He is fully geared and the rents cover most of his costs. He plans to raze the old shacks and rebuild townhouses......the whole suburb is ripe for redevelopment, according to the council.
Click to expand...

lol. Developers are a completely different market. We are talking about buying an investment property here - not commercial development sites. Please stick to the context.
 
Bigtone said:
I only have one IP in Frankston (south) so I have no real basis for or against it. It has been a great performer (up 50% in three years since purchase) but have doubts next 2-3 years of much growth. I do know area very well though.

As for Stigma, what about St Kilda, Richmond, Brunswick, Footscray and many more, times change. 10-20 years ago they were places to avoid.

As for successful businessman, i would say many live in Frankston South and especially on Olivers Hill.

I know many that have retired at 45 or below with assets $5-$10m, not super rich by any means but successful none the less.

I won't be buying anything else in Funky Town in the foreseeable future so in a way I agree with your consensus but not the logic used to arrive there.

Cheers BT
Click to expand...

Yes last time Richmond (for example) was a rough place to live. But at that time, places like Toorak were not. Can we safely say that Richmond has outperformed Toorak? Hell no. People still pay more for Toorak houses than they do Richmond houses.

And no - rich people don't live in Frankston South. The true rich people live in Flinders, Sorrento etc. Past Frankston.
 
Wunderbar said:
lol. Developers are a completely different market. We are talking about buying an investment property here - not commercial development sites. Please stick to the context.
Click to expand...

My friend, lets call him "Mr Smith", is an investor more than a developer. All his North Frankston acquisitions are IPs, funded by banks. None are "commercial development sites" as you say. Yes, he may develop them.....but, unlike ordinary developers, he will do so at his own pace. He's already made decent gains and the IPs almost pay for themselves. He seems to be in no hurry.

Most older houses in Frankston are zoned for redevelopment.......or so the local council says. Smithy cottoned on to this years ago, well before the rest of us. Excluding his PPORs, he is worth a few million dollars.

No he doesn't live in Frankston. He spends most of his time overseas.
 
annie lumen said:
I know several wealthy people, contrarians, who buy in mispriced places like Frankston. One person I know - I estimate his net worth to be around $7m excluding PPOR- raised a lot of eyebrows when he bought several delapidated but rentable old homes in Frankston North barely 3 yrs ago for around $170,000. These same houses are now selling for close to $300,000. Not a bad gain is it? He tells me he isn't selling anytime soon. He is fully geared and the rents cover most of his costs. He plans to raze the old shacks and rebuild townhouses......the whole suburb is ripe for redevelopment, according to the council.
Click to expand...

3 years ago 170K and only 300K? with the boom would have expected it to be 400K. You can buy in doncaster east landed units for 220K 3 years ago now and sell them 550K now.

Your wealthy friend might be only 1 of 10000 wealthy people choosing to invest or live in franktson. The people with real wealth would not live there but choose suburbs like brigthon, toorak, south melbourne, albert park, carlton, balwyn etc. If you network properly - many of the sites people buy are not in frankston. Unless you have really seen the real net worth of others and how they buy property in auctions and inspections in those suburbs - it's impossible to say frankston is a better performer. Frankston has a great beach compared to what it was in the 90s but capital growth might grow - but when it comes down to the crunch - who will be buying there?
 
Hi Melbournian,

I notice that you are fairly new to the forum. This debate about the merits of Frankston as a place to invest in has been discussed ad nauseum over the years.

I think the general consensus is that Frankston has performed well over the longer term. There are several very wealthy/financially independent investors on this forum who have properties there.

You may want to check out the threads below which demonstrate that capital growth has been achieved in outer suburbs over time.

Many of your posts refer to where extremely wealthy people invest etc - nothing wrong with this. Forgive me if I am mistaken, but the premise that this forum is based on is to provide a formula for ordinary Australians to invest for their financial future by buying median priced real estate in a variety of accessible suburbs. Jan Somers promotes this in her books, and accordingly set up a forum so that investors could discuss real estate investment ideas with each other.

There is nothing wrong with your idea to follow 'the rich' in where they buy. However, many people cannot afford (at least initially) to buy real estate in these prime areas. Places like Frankston and other affordable suburbs are accessible to many investors and act as a stepping stone in their investment journey.

I also note from your posts that you are reasonably young (nothing wrong with this), but you may want to read the threads of older and more experienced investors and take their comments on board before casting further disparaging remarks about certain areas.

Here are some worthwhile threads to get you started.

http://www.somersoft.com/forums/showthread.php?t=31663

http://www.somersoft.com/forums/showthread.php?t=56951&highlight=Frankston

http://www.somersoft.com/forums/showthread.php?t=51940&highlight=Frankston

http://www.somersoft.com/forums/showthread.php?t=66561&highlight=Frankston

Enjoy,

Regards Jason.
 
Last edited:
thanks jason - for the reasonably young comment.

i started not that well off too as an "odinary australian" - if you know my history - i got retrenched from my job and only had $800 in my bank account with a mortgage of 200K at the young age of 21. i had to really think deep about how to get my way out of it and it made me a better person with the ability to see gaps in many areas of investments where i would not been able to. When you eat cornflakes for breakfast, lunch and dinner - it teaches you to appreciate things that you have taken for granted and blown away in the past. So i too have been at the bottom of the ladder and understand what is it like when one starts with basically nothing.

I have experience hanging out in frankston due to the fact that i was schooled in mt eliza - so my experience are based on real life experiences. I don't look down on any suburb or judge anyone.. in fact i also purchased in outer melbourne - as everyone has his or her strategy.To say moderate amount of wealthy or high net worth investors invest in frankston would be incorrect in my opinion which was the basis of what i was trying to explain to the other poster. I understand many people do invest in frankston so i guess it is quite a sensitive topic which i will just leave it for the time being on my opinions.
 
Last edited:
Jingo - I wouldn't say investing in Carlton / Balwyn are for extremely rich people. In fact I know this guy in a 70k job - and by no means rich - who just invested there the other week.
 
annie lumen said:
Where do extremely rich people live? :D;) With the models and bottles?
Click to expand...

OK forget rich or where extremly rich people buy

how would an investor approach to buy a property in melbourne. i curios to find out how other investors would. i would approach this using use technical and fundamental analysis

Say gold prices
--------------------
technical analysis
Historically gold prices moved up during September 11th, GFC, asian tsunami etc.

fundamental analysis
Culturally - many middle eastern and asians prefer to transfer their wealth to gold during times of economic uncertainty.
considered a safehaven for investors.


Suburb like frankston
----------------------------
tehnical analysis
House Median price in march 2006 -230K, median now is 360K
Unit median prices in March 06 - 225K, median now is 288K
Only downward spiral was in march 09 which lasted a year
Currently quarter "median" percentage growth for houses shows from march 2010 -10% till today

fundamental anlaysis
Census showed that 33.1% owned outright in frankston (which is a good thing)
Income and household levels (low to high) - critical in determining the growth in my opinion.
Jobs at frankston (primary jobs?) demands for services
infrastructure factors (new bridges, highways etc)
demographics (single, married, race etc)
Social factors
School ranking compared to fringing suburbs (i know peninsula school in mt eliza as very good track record in VCE)

So rather than saying - i was believing naysayers were putting down a suburb so i didn't buy . or saying the range was 2.5million anything below 500k is a good buy - i don't think that's the right way to invest. I think a good approach is to look into the suburb methodically to minimize your risk.

By combining both fundamental and technical - u can have better way of knowing whether it is a good investment or not. I know there are a lot of seasoned investors out there and by no means do i mean to discredit anyone - i just feel that too much reliance on historical (technical analysis) has an element of gambling to it in my opinion. with macro factors yes - in this current climate -- if you had around 10 milion to invest and wanted to diversify - why not?

When i say i have tested this method (just technical) in the casino - the probabilities were less than favourable to me.
 
Last edited:
I only buy in areas with strong rental demand allowing me to get a high yield for my property. A suburb with high proportion of renters is favourable because even in a recession you can always find a tenant.
 
For demographic reasons, I only invest in major-city suburbs where there is already infrastructure in place.

I prefer not to overcomplicate things. I've never seen a Bunnings or McDonalds in Australia close down for want of business. If one follows McDonalds and Bunnnings, its hard to go wrong provided one buys cheaply. The boffins in these organizations have done half the work for me in deciding where to buy.

It is noteworthy, however, that not all suburbs where Bunnings and McDonalds are located are cheap. The definition of "cheap" is subjective. For me, it means that my outgoing costs after receiving rent and paying all costs is minimal. That rules out Toorak etc - places that I personally like but cannot afford.

I'd love to get data on truancy rates. This is not easily obtained. I feel confident that cheaper suburbs with low truancy rates might have a positive future.


.
 
annie lumen said:
For demographic reasons, I only invest in major-city suburbs where there is already infrastructure in place.

I prefer not to overcomplicate things. I've never seen a Bunnings or McDonalds in Australia close down for want of business. If one follows McDonalds and Bunnnings, its hard to go wrong provided one buys cheaply. The boffins in these organizations have done half the work for me in deciding where to buy.

It is noteworthy, however, that not all suburbs where Bunnings and McDonalds are located are cheap. The definition of "cheap" is subjective. For me, it means that my outgoing costs after receiving rent and paying all costs is minimal. That rules out Toorak etc - places that I personally like but cannot afford.

I'd love to get data on truancy rates. This is not easily obtained. I feel confident that cheaper suburbs with low truancy rates might have a positive future.


.
Click to expand...

Actually quite a smart strategy. BTW 'cheap' means good value, without considering the absolute magnitude of the price. People confuse it with 'low price'
 
annie lumen said:
For demographic reasons, I only invest in major-city suburbs where there is already infrastructure in place.

I prefer not to overcomplicate things. I've never seen a Bunnings or McDonalds in Australia close down for want of business. If one follows McDonalds and Bunnnings, its hard to go wrong provided one buys cheaply. The boffins in these organizations have done half the work for me in deciding where to buy.

It is noteworthy, however, that not all suburbs where Bunnings and McDonalds are located are cheap. The definition of "cheap" is subjective. For me, it means that my outgoing costs after receiving rent and paying all costs is minimal. That rules out Toorak etc - places that I personally like but cannot afford.

I'd love to get data on truancy rates. This is not easily obtained. I feel confident that cheaper suburbs with low truancy rates might have a positive future.
.
Click to expand...

That is a bit of a dangerous approach to take - mcdonalds in frankston has been around since early 90s before the extension of m1/eastlink was planned. and i wondering if mcdonalds and bunnings equates to being infrastructure if it is something u are indicating. Growing income levels that come with job growth is important to me as the more job opportunities that arise brings more wealth to the suburb. Say for eg petroleum was suddenly discovered.

I would be pretty careful if someone said that the range was 500K - 2.5million and anything below 500K is a good buy - that's just dangerous i think.

I think toorak is not for me as well - but wunderbar is right - rental demand is important as well and do not equate cheap as being good value.
 
Last edited:
You must log in or register to reply here.

Similar threads

M
Reflections of an investment newbie
2
Replies
36
Views
7K
Northy85
N
D
The Newbie that gatecrashed... gatecrashes again!
Replies
11
Views
4K
DoAndroidsDream
D
J
PPOR/Future IP in Melbourne for around 250k
Replies
1
Views
1K
Chris B
Chris B
Jake Milne
Deer Park - Write Up
2 3
Replies
44
Views
11K
Roos1
R
K
How to best spend 350k in Melbourne?
Replies
2
Views
2K
Hodge
H
Back
Top