Sorry for the long first post, please skip it and read the second post, for this is the portion where I hope to get help from. The questions are under the heading "Questions" towards the end of the second post
This thread is inspired by Kim5’s thread . The first part of this thread is about my first IP. By describing my current financial situation in the second part, I earnestly hope to get good investment suggestions and strategies from fellow property investors. I was somewhat hesitant in creating this thread because firstly I don’t know whether it is wise to disclose your financial situation in a public forum and secondly I don’t know what the responses will be. But I guess I would need to provide the details in order for others to help me.
I bought my first IP in Hoppers Crossing (Vic) for 300K (listed 275-295K) through private sales 6 weeks ago and the property settled on 21 Dec.
This is an old double-storey brick veneer house, in pretty good condition.
Upstairs – 3 bedrooms (2 with BIRs), 1 bath, 1 toilet
Downstairs – renovated kitchen/meal area/lounge, 2 lounges (converted to bedrooms, both with doors, 1 with BIR), study or bedroom, bathroom with toilet
Pros
1. Good location
- 7 min walk to Werribee Plaza (this will double in size to reach scale of Highpoint S.C.)
- 6 min walk to Wyndham Leisure & Events Centre (has indoor swimming pool, spa, gym, conference rooms & auditorium)
- 20 min walk to Hoppers Crossing Train Station
- 1 min walk to a bus stop
- has a primary school nearby
- close to Corey High School, a select-entry high school located in Werribee Technology Precinct, scheduled for completion in 2011. This will be one of 4 select-entry high schools in Melbourne.
2. Compared to other outer suburbs, commuting time to Melbourne CBD is not bad – 33 mins by car (based on Google Maps direction tool) and 32-43 mins by train (from Hoppers Crossing to Flinders St Station).
3. Many rooms – 6 bedrooms (2 converted from lounges)
4. Very bright, north-east facing house -previous owner says that the house is well-lit at all times of the day. There are 2 light wells in the kitchen and front lounge that we had mistaken for a lamp and tried to find the switch for.
5. The street appears to be a quiet one. Other houses in this street look pretty nice too.
6. Bargain?
- There appears to be intense buying interest for this house. The house is open for first inspection on a Sat and the agent decided to close the sale by Tues due to the overwhelming response. I arrived at the house near the end of the inspection so I could not gather how many people had inspected before us. There were about 4-5 other groups of people at that time, including one Chinese from Sydney who told me the houses in Wyndham Vale are newer but the location of this house is very good. When I put in my offer on Tues, the agent showed me a SMS from China asking for an appointment to inspect the house the following week upon his return from China. Later that evening, the agent told me someone had put in a conditional offer of 302K. I was also aware of an unconditional offer of close to 300K. However, I think the real reason for this early close of-sale is that the previous owner needs the money urgently. The previous owner purchased this house 1 year ago when he first arrived from China. As his parents are coming over soon, he bought a better house, closer to the train station, 2 months ago. I believe he had paid in cash for this house as my conveyancer told me he possesses the title and does not owe any loan so I need to pay for his lawyer to come to the city to do the settlement. When I collected the keys from the agent’s office, the receptionist told me I got a bargain. But this may be biased since she is a staff. When I got someone to steam vacuum the carpet, he told me if he had known the house is so large, he would have charged me much more. He thinks that I pay a good price for this house. His words may be more reliable since he has many years of experience cleaning houses all over Melbourne.
Cons
1. Land area is 531 sq metres; will prefer it to be more than 600 sq metres.
2. No garage; only a single carport. The carpet upstairs and on the staircase is very old. Some walls need a coat of new paint. As an IP, I will not bother with these.
3. Still a considerable walking distance to the train station; will prefer it to be 10 minutes or less.
4. The agent told me the median price for Hoppers Crossing is 285K so 300K is higher than the median. I heard from others in this forum that you should try to buy something below market price.
5. The gross rental yield is not great – 5.2% and it is a CF negative investment.
6. Hoppers Crossing/Werribee are among the cheapest suburbs in Melbourne. The capital growth for the last 10 years has not been spectacular. However, there is nothing wrong with the fundamentals – facilities, demographics, personal safety, distance to the city, etc. It does suffer from an image problem in that a considerable number of people (particularly those who have never visited it) perceive the suburb to be inferior compared to other suburbs (this is what I inferred from discussion in this forum). IMO, it possesses growth potential and population growth/gentrification will change people’s perceptions towards this suburb. I made this investment decision mainly based on my affordability/serviceability and inadvertently, faced risk of slow capital gains. It is good news that Sash mentioned that hotspotting.com.au has recently included Wyndham in its hotspots areas.
7. There is ample land in the surrounding growth suburbs (Tarneit, Truganina, Williams Landing, Wyndham Vale, Point Cook) so this may explain the poor capital gains. These suburbs suffer from lack of public transport and shopping facilities. Only Williams Landing will be close to a new train station. Hoppers Crossing is mostly built-up and by itself is a very large suburb so price differentiation within the suburb will occur with homes nearer the train station and shopping becoming dearer than those further away. In this respect, it is fortunate that this IP is located near Werribee Plaza and not too far away from the train station.
I will give my financial situation in the next post. Here are some pics of this house.
The kitchen and the meals area are large enough to put a sofa (was used as the lounge).
The kitchen
Bathrooms
This thread is inspired by Kim5’s thread . The first part of this thread is about my first IP. By describing my current financial situation in the second part, I earnestly hope to get good investment suggestions and strategies from fellow property investors. I was somewhat hesitant in creating this thread because firstly I don’t know whether it is wise to disclose your financial situation in a public forum and secondly I don’t know what the responses will be. But I guess I would need to provide the details in order for others to help me.
I bought my first IP in Hoppers Crossing (Vic) for 300K (listed 275-295K) through private sales 6 weeks ago and the property settled on 21 Dec.
This is an old double-storey brick veneer house, in pretty good condition.
Upstairs – 3 bedrooms (2 with BIRs), 1 bath, 1 toilet
Downstairs – renovated kitchen/meal area/lounge, 2 lounges (converted to bedrooms, both with doors, 1 with BIR), study or bedroom, bathroom with toilet
Pros
1. Good location
- 7 min walk to Werribee Plaza (this will double in size to reach scale of Highpoint S.C.)
- 6 min walk to Wyndham Leisure & Events Centre (has indoor swimming pool, spa, gym, conference rooms & auditorium)
- 20 min walk to Hoppers Crossing Train Station
- 1 min walk to a bus stop
- has a primary school nearby
- close to Corey High School, a select-entry high school located in Werribee Technology Precinct, scheduled for completion in 2011. This will be one of 4 select-entry high schools in Melbourne.
2. Compared to other outer suburbs, commuting time to Melbourne CBD is not bad – 33 mins by car (based on Google Maps direction tool) and 32-43 mins by train (from Hoppers Crossing to Flinders St Station).
3. Many rooms – 6 bedrooms (2 converted from lounges)
4. Very bright, north-east facing house -previous owner says that the house is well-lit at all times of the day. There are 2 light wells in the kitchen and front lounge that we had mistaken for a lamp and tried to find the switch for.
5. The street appears to be a quiet one. Other houses in this street look pretty nice too.
6. Bargain?
- There appears to be intense buying interest for this house. The house is open for first inspection on a Sat and the agent decided to close the sale by Tues due to the overwhelming response. I arrived at the house near the end of the inspection so I could not gather how many people had inspected before us. There were about 4-5 other groups of people at that time, including one Chinese from Sydney who told me the houses in Wyndham Vale are newer but the location of this house is very good. When I put in my offer on Tues, the agent showed me a SMS from China asking for an appointment to inspect the house the following week upon his return from China. Later that evening, the agent told me someone had put in a conditional offer of 302K. I was also aware of an unconditional offer of close to 300K. However, I think the real reason for this early close of-sale is that the previous owner needs the money urgently. The previous owner purchased this house 1 year ago when he first arrived from China. As his parents are coming over soon, he bought a better house, closer to the train station, 2 months ago. I believe he had paid in cash for this house as my conveyancer told me he possesses the title and does not owe any loan so I need to pay for his lawyer to come to the city to do the settlement. When I collected the keys from the agent’s office, the receptionist told me I got a bargain. But this may be biased since she is a staff. When I got someone to steam vacuum the carpet, he told me if he had known the house is so large, he would have charged me much more. He thinks that I pay a good price for this house. His words may be more reliable since he has many years of experience cleaning houses all over Melbourne.
Cons
1. Land area is 531 sq metres; will prefer it to be more than 600 sq metres.
2. No garage; only a single carport. The carpet upstairs and on the staircase is very old. Some walls need a coat of new paint. As an IP, I will not bother with these.
3. Still a considerable walking distance to the train station; will prefer it to be 10 minutes or less.
4. The agent told me the median price for Hoppers Crossing is 285K so 300K is higher than the median. I heard from others in this forum that you should try to buy something below market price.
5. The gross rental yield is not great – 5.2% and it is a CF negative investment.
6. Hoppers Crossing/Werribee are among the cheapest suburbs in Melbourne. The capital growth for the last 10 years has not been spectacular. However, there is nothing wrong with the fundamentals – facilities, demographics, personal safety, distance to the city, etc. It does suffer from an image problem in that a considerable number of people (particularly those who have never visited it) perceive the suburb to be inferior compared to other suburbs (this is what I inferred from discussion in this forum). IMO, it possesses growth potential and population growth/gentrification will change people’s perceptions towards this suburb. I made this investment decision mainly based on my affordability/serviceability and inadvertently, faced risk of slow capital gains. It is good news that Sash mentioned that hotspotting.com.au has recently included Wyndham in its hotspots areas.
7. There is ample land in the surrounding growth suburbs (Tarneit, Truganina, Williams Landing, Wyndham Vale, Point Cook) so this may explain the poor capital gains. These suburbs suffer from lack of public transport and shopping facilities. Only Williams Landing will be close to a new train station. Hoppers Crossing is mostly built-up and by itself is a very large suburb so price differentiation within the suburb will occur with homes nearer the train station and shopping becoming dearer than those further away. In this respect, it is fortunate that this IP is located near Werribee Plaza and not too far away from the train station.
I will give my financial situation in the next post. Here are some pics of this house.
The kitchen and the meals area are large enough to put a sofa (was used as the lounge).
The kitchen
Bathrooms
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