My Melbourne IP Conundrum

[ThomasCrown]

Hey Guys,

Long time lurker - first time poster!

And, I might add… thank you for being so generous with your wealth of knowledge – I’ve crammed my brain so full of information it’s beginning to hurt!

So this is my problem…
My wife works in Melbourne on a contract basis – 3 months here 4 months there etc.
Until now she’s been staying with family but you can only stay so long…
So we’re looking at buying a 1 bed apartment somewhere around: Richmond, Kew, Pt Melbourne, Sth Melbourne, Okleigh, St Kilda – (She needs to be close to the city for work).

I’d also like to see some CG come out of it as well.

But here’s the rub… We need to be able to get short term leases in place while she’s not there (3month – 6 month) so we don’t have to cover too much of the mortgage. And we’d be looking at something newish to appeal to executives.

Do you know of any PM who offer this service or if this possible? Is their anywhere you can point me to further investigate this…?

And am I looking around the right areas for CG. (The budgets around $300k - $440K)

I’ve already looked into serviced apartments and they’re out of the question because of the hard to sell factor and the commercial arrangements currently don’t suit my portfolio aspirations.

Any help would be much appreciated – I’ll also start a reno thread for our PPOR which we’re doing a refurb on the kitchen, bathrooms and laundry – which will become an IP next year - should be fun.

Thanks in advance!

 

[Wunderbar]

I'm sure some Property Managers will do it, but don't forget they charge a fee upfront (equal to about 1 week's rent or more) for actually finding the tenant. So if you're doing it every 3 months, it's going to be very expensive for you.

The alternative thing you can do is, find a 2 bedroom apartment and rent out the 2nd bedroom permanently which will at least help with half the mortgage. But finding such an apartment in the 300-440k range in those areas is a bit difficult i must say.

 

[zed_kid]

2 words. South Yarra.

 

[mary&mat]

Welcome!

St Kilda may be a goer too...hard to find a nice one for that budget.

Although a friend picked up approx 80m2 in St Kilda on Inkerman st or Carlisle st for $440K last April...don't know how much it'd be now, but it's in a small block with a balcony & secure osp. Bit dodgy at night time if you're in a side street with not much lighting down that way.

South Yarra would be lovely too, once again, not sure what you'd get in that range.

Good luck!

 

[The Y-man]

But here’s the rub… We need to be able to get short term leases in place while she’s not there (3month – 6 month) so we don’t have to cover too much of the mortgage. And we’d be looking at something newish to appeal to executives.

Ok, I am going to freak some people out.....

Because of this requirement, it is one of the few times I would say:
CBD ( )
Docklands
Southbank

http://www.realestate.com.au/property-apartment-vic-docklands-106284521
http://www.realestate.com.au/property-house-vic-docklands-106284513

I just don't think you're going to get short term exec rentals any further out -because they literally want to be walking distance to work in cases like these - even St Kilda Rd/ Queen Rd might be a stretch.

The Y-man

 

[Wunderbar]

Why would you put a 'gasp' next to CBD, but not next to docklands nor southbank?

 

[The Y-man]

Why would you put a 'gasp' next to CBD, but not next to docklands nor southbank?

If you look back on my posts and how I bag CBD apartments....

The Y-man

 

[starter]

For short term rentals there is another market that is less saturated than execs, travellers/tourists/international tourists staying in Melbourne for a few months.

I've found that especially in the inner south/south-east there is a big demand for short term rentals from those passing through Melbourne for a few months. You can readily advertise on Gumtree and if the place is furnished you won't have much trouble finding tennants.

Obviously quality of tenants overall won't be as good as with execs, but with careful vetting you still should be able to find suitable tenants.

 

[ThomasCrown]

Wow, thanks for all the input.

So i went and spoke to my broker this afternoon about what kind of cash the bank is willing to stump up and they came back to me with up to $600k... great but a little scary

This gives me a little more room to move (pardon the pun!)

I don't think i want to use up all my capacity on just one ip yet - but knowing that we can get something a little better is nice to know.

Here's the catch...

I want to be careful with what i do because i want this property to help set up my development plans for the future in 3 years time (not the property itself) - but the increased CG, revalue and use of the equity...

Why 3 years you say...? time my friends i'm a full time Project Manager building bridges, substations etc, which keeps me busy into the early hours each day. I'm also studying a Construction Management Degree part time so there's not much time left over to focus on developing until i finish studying.

When i'm done i'll be ramping up my ambitions and that's why i want this property to (fingers crossed) be a good stepping stone.

So... knowing this - increased borrowing capacity, looking for CG, i could be leaning towards a 2 bedroom apartment / unit

but guys...
I got know idea about inner city Melbourne and what are good CG growth areas - i do like the look of South Yarra though.

What are your thoughts ( and thanks in advance )

 

[dog]

Look at Williamstown too, there's 2 bed apartments with osp etc for mid-high 3's and definitely a market for short term stays (try Compton and Green r/e for info regarding demand for these - they had a few on these type of leases last time I spoke with them), as I'd imagine StKilda would have due to lifestyle.

 

[mary&mat]

$600K! You're laughing!

With that amount, you'll surely be able to pickup a sizable 1br in Sth Yarra, Toorak, South Melbourne, St Kilda East, Port Melbourne etc etc.

 

[zed_kid]

Yes 600k will get you in to prime 1br apartments anywhere in melb, you can even find a 2br in South Yarra for that much, but I do agree with you Tommo that you shouldn’t throw all your money in to 1 IP and don’t leverage to the hilt at the moment. A 1br in South Yarra for 450k-500k is a very good start. Just avoid anything on Darling Street it’s too close to the rail line there. The area east up Toorak rd away from chapel street is IMO the best SY has to offer.

Edit: also what starter said is very true. As soon as we put one of our SY IPs on Gumtree the emails start pouring in. It’s mostly tourists / backpackers and it does slow down during the winter months... just an FYI. Good luck with your IP hunt by the way!

 

[mary&mat]

I second the no go for Darling St. Too many schoolboys passing by each day & I think there's a busy reception centre there too.

 

[zed_kid]

I second the no go for Darling St. Too many schoolboys passing by each day & I think there's a busy reception centre there too.

Haha I remember when Saratoga night club was there, man the amount of fights outside that place was amazing. They closed that place down now.

 

[mary&mat]

Heh heh, I remember when Saratoga was just off St Kilda Rd near McRob Girls School...good times

Will stop sidelining thread now

 

[ThomasCrown]

Love your work guys,

i'm deep into the search phase trying to find what's out there. Thanks for the tip Zed_kid and Mary&Mat about Darling St.

I'll also start checking out Gum Tree to keep abreast of the in's and out's of what's available for when the time comes.

I'm sure it's been asked... my apologies in advance ...other than Domain and R/E.com.au what other resources could you recommend to locate potential properties?

The plan is for me to find potential ip's and my wife when she's not working 12- 14hr days to have a look see on the weekends - and then i'll fly up when we get a little closer to playing the game.

Once again - i so look forward to being able to contribute to this forum because you guys are just so giving and i can't thank you enough for that

 

[mary&mat]

Hi ThomasCrown,

Could you contact a few agencies in the areas you're after & let them know you have say, $380-$480K to spend, your finance is ready to go & you're a serious purchaser? Perhaps that way you will get first look at anything that comes onto their books?

 

[tubs]

Google short term accomodation in melbourne. There may be some places who rent out apartments and have apartments for sale. You could stay in it when you need to and lease it out through them when you don't need it.

 

[Spanish1]

I'm voting for a corporate lease once you've bought the apartment. This is a short-term lease but with the bonus you'll have corporate/business tenants, especially if it's fully furnished. http://www.corporatekeys.com.au might be worth a look!

 

[the_captain]

Have a search of this forum for dual key apartment. I think this would be a better bet. A dual key apt is a dwelling that has one outside door opening onto a small foyer that has two locked doors that the apartments are behind. Your wife would live in one. The other would be rented out on a usual 12 month lease