Melton Thread ....No 2

[Peter 14.7]

Calling All Melton Investors ( and knockers) !

Many of you would know and have contributed to the excellent Melton thread below

http://www.somersoft.com/forums/showthread.php?t=32619

It was closed due to sheer size (and some sniping) but can still be viewed and read at the above link.

So as there is still a genuine interest in the area in exchanging info on this suburb, we can start this second thread.

Easy to manage and please keep it professional not personal.

So here is the first comment from Bernard Salt of KPMG. All positive - thanks to Mystery for the link.

http://melton-leader.whereilive.com.au/news/story/melton-lives-the-dream/

Please contribute. Good and Bad.

Regards

Peter 14.7

 

[schweedy]

I find the problems lie in the fact the new growth areas around Melton dont have infastructure in place yet. There are proposed things like shopping centres and extended bus routes, but as of yet, they haven't happened. Thus there are a lot of new houses in the outer lying parts of Melton that dont have easy access to these things.

 

[Peter 14.7]

I agree Melton is a car only world, sadly like must of regional Australia or even, the cities. I.E. :Live in Cronulla Sydney and work in Parramatta is a nightmare unless you drive.

Shopping I find is pretty good. The new Shopping Centre is in. Bunnings is huge. Fast food well serviced. 20min drive to Watergardens for mega shopping centre. And Bachus Marsh has great cafe/s.

The biggest ( personal) downside to Melton is the poor state of the nature strips and gardens. It is so dry in Summer and essentially clay soils that only drought resistant plants or pebble look any good.

Peter

 

[schweedy]

Apparently there will be another shopping precint set up near the new Arnolds Creek Estate area, which will be great for a lot of the new houses our that side of melton.

They definately have the shopping side of things covered 5 supermarkets, 3 large fruit and vegies shops, several pubs/clubs. I was amazed after moving here from the eastern suburbs how the 'locals' considered themselves 'without' so much, because they only had a Kmart in town. From an outsiders point of view, within 5 mins drive they had , Foodworks, IGA, Aldi , Safeway and 2 Coles, every type of take away, several restaurants, movies, the list goes on. And because they dont have more than a Kmart, the smaller shops did a roaring trade as well. Good all around for the developing area.
I would often have to drive further to reach half of these stores when I lived in the south eastern suburbs. To me they have it all here, at your finger tips.

 

[very_ready]

i think that there is too much supply in melton, there is a lot of land that always seems to be available.

Another downside is the crowd there isnt the best.

But Melton also has many positives.

 

[tobe]

Melton is cheap, and will be for a long time relative to the rest of Melbourne, until the new housing estates alongside caroline springs reach it. Even then prices will be subdued until the area up until Bachus marsh is built out, as new buyers will usually opt for a new home over a second hand one a smidgeon closer to Melbourne....
There is no natural drawcards, like the sea, or mountains, the only drawcard for Melton is its relative affordability. Its affordable because there is no limit to supply of new land for housing.
The yield isnt fantastic, not nearly enough to make up for the lack of future capital growth, in my opinion...

 

[tobe]

And as for Salt's quotes, they are hardly an endorsement, just some thoughts on Meltons recent population growth, affordability, and some warnings on not being a dormitory suburb.... Is this because it already has the tendancy to become one?

 

[Peter 14.7]

Agree.

To me Melton is long term, secure, set and forget. No great CG , just steady income investament.

It downside is also its upside. Strong rental market due to lower social- economic base. In 20 years it should be the regional centre for the west of Melb.

Stigma will be there for a while.

Peter

 

[JIT]

Agree.

To me Melton is long term, secure, set and forget. No great CG , just steady income investament.

It downside is also its upside. Strong rental market due to lower social- economic base. In 20 years it should be the regional centre for the west of Melb.

Stigma will be there for a while.

Peter

Peter,

Without much CG... not sure what's the point?

What sort of net income are you talking about after costs?
It'd still usually be negative wouldn't it?

20 years is a long-time to speculate too...

 

[paul2299]

Where else can you get a three-bedroom brick-veneer home for less than $300,000 only 30km from the city?” Mr Salt asked.

Lilydale? Or pretty much anywhere else 30 km's from Melbourne?

 

[Peter 14.7]

Peter,

Without much CG... not sure what's the point?

What sort of net income are you talking about after costs?
It'd still usually be negative wouldn't it?

20 years is a long-time to speculate too...

There is CG just not great.

I bought in middle 2007 for $230k for large three bed and $228k for 4 bed.
At the time both rented for $240.

Three years later the value are about $300k.
Rents are both $280 but could be $300 in the open market. Previous PM let things stagnate.

That is a CG and rent increase of 7% per annum. Not skyrocket stuff but at present rates Meltons pays for themsleves once you count Depreciation benefits. Both homes built new in 2003 and very little maintenance required. In another 3 years they will be + CF.

Having a balanced portfolio is my strategy. So Melton is my low risk IPS. My high risk in is Sydney CBD.

Poor tenants problems are a risk in Melton but new PM fixed that.

FYI Peter

 

[Peter 14.7]

Lilydale? Or pretty much anywhere else 30 km's from Melbourne?

New built?

 

[rodimus]

Hi
I built a house on a land in Melton for total of $195,000 investment. Currently the property renting for $290 p/w.

I think currently the house is about $255,000? It's been 1 and half years since i built it.

BUt the thing is it is a subdivided strata land, small lot 300sqm, and have to pay some body corporate. But the house is separate, but would still considered as a 'unit'.

Is it a good time to sell in Melton?
I;m happy with my current tenants.

 

[Alfa]

Hi
I built a house on a land in Melton for total of $195,000 investment. Currently the property renting for $290 p/w.

I think currently the house is about $255,000? It's been 1 and half years since i built it.

BUt the thing is it is a subdivided strata land, small lot 300sqm, and have to pay some body corporate. But the house is separate, but would still considered as a 'unit'.

Is it a good time to sell in Melton?
I;m happy with my current tenants.

Why would you consider selling? You seem to have reasonable capital growth for 18 months of holding and you have a very good rent yield of over 7%. It seems like it pretty much looks after itself.

Alfa

 

[Suraj]

Hi Peter.

Hi Peter. It look like you are bit eperience property invester and property investment is working for you. You bought nearly new large 3 bd house in melton arround 230K in 2007 now 300K ecellent growth. While I bought 17 year old 12sq house at 200k in 2008, 3min walk to high st, very tidy, rent 230 now. Agent said they can sell arround 250k. But your property has gone up much.
Do you follow any special strategy when buying property? any idea and hints? appreciated.

Thank you

Suraj

 

[Peter 14.7]

Hi Peter. It look like you are bit eperience property invester and property investment is working for you. You bought nearly new large 3 bd house in melton arround 230K in 2007 now 300K ecellent growth. While I bought 17 year old 12sq house at 200k in 2008, 3min walk to high st, very tidy, rent 230 now. Agent said they can sell arround 250k. But your property has gone up much.
Do you follow any special strategy when buying property? any idea and hints? appreciated.

Thank you

Suraj

Aww, thankyou, such praise.

Happy to answer but so I can be detailed may I ask you, when in 2008 did you buy and what size is your land in Central Melton.

regards, Peter 14.7

 

[Peter 14.7]

Hi
I built a house on a land in Melton for total of $195,000 investment. Currently the property renting for $290 p/w.

I think currently the house is about $255,000? It's been 1 and half years since i built it.

BUt the thing is it is a subdivided strata land, small lot 300sqm, and have to pay some body corporate. But the house is separate, but would still considered as a 'unit'.

Is it a good time to sell in Melton?
I;m happy with my current tenants.

It is only a good time to sell if:

1. you need the cash
2. you have better deal elsewhere that is so good will cover the selling and buying costs of the changeover
3. you think a extradordinary event is about to hit Melton/the property that will massively devalue the area/the IP. Like it is full of termites, nuclear reactor for Melton, Gov to abandon growth plans and money.

If not , hold and let it grow.

Peter

 

[Suraj]

Hi Peter, sorry for long gap, Any way I bought my house in April 2008 and land content is 560Sqm.

 

[Peter 14.7]

Hi Peter, sorry for long gap, Any way I bought my house in April 2008 and land content is 560Sqm.

Suraj

So you bought for $200k 2 years ago. You are told it is now $250k by agent.

So you made a gross per annum increase of 12% each year.

I bought for $230k, agent just told me around $280 to $300k. That is alaos about 12% to 15% per annum.

My rent has rised $40 a week, yours has rised $30 a week.

essentially we ar ethe same.

The only advantage I have is mine is 7 years old at 2003 and has higher depreciation and yours is 17 years old so 1993 and has less depreciation.

Yours is closer to city centre though. Land is the same.

So to close, always consider the holding cost and depreciaton is often forgetten. that is usually another $5k is write off so essenitally another $100 a week in rent. Say yours is $2.5k that is a $50 a week advantage. I assume you have depreciation schedule?

If not, PM me and I can do one for you via Deprecaitor. I do them as hobby

Peter

 

[Suraj]

Thank you very much for your good analusis and advice. So it looks like its doing good. Yes I have made a depreciation schedule and first yr it was 4.5K second 3K this year may be I think I can cliam 2.6K. Any way thank you for your comment. Peter what you think about current market? do you invest only in Vic or other state too? I am thinking to buy one investment property this year, just looking arround. As melbourne and Sydney are already gone up so high, so thinking to buy one arround Queensland South eg Logan Central area. Whats your opinion about the market and where to buy another investment property now. Just discussion. Thank you very much.