New Studio/1br Inner Melbourne

With the amount of cranes dotting the Melbourne skyline I'm surprised at the seeming lack of new/off the plan apartments listed on domain/re.com

I'm looking for small apartments, studio/1bedder at 250k or less if possible. Does anyone have any tips for finding a suitable property?

I'm a first home buyer so I want to look at new places first.

Cheers
 
I'm a first home buyer so I want to look at new places first.

Cheers

This does not compute............. :confused:

For me, the MOST difficult purchase is a new one - they are the (almost the only) ones you can get duped in and lose money on.......

The Y-man
 
Well if I'm wrong on this tell me, I've only just begun researching, but is there not a $10K freebie available for first home buyers of newly constructed residences?

From this link: State Revenue Office
For contracts entered into on or after 1 July 2013, eligibility for the Grant will be limited to buyers of new homes.
 
Yeah, I kind of expected that. Thanks for the word.

Are there any good threads / faqs here on buying small apartments?

I notice many listings are listed exclusively as investment properties as they are in student housing buildings (Unilodge etc). What's to stop me telling the tenant to hit the bricks after their contract is up and living there myself?

Any good guides on reasonable owners corp / property tax / other outgoings I can expect with apartments? I'm trying to get my head around the right questions to ask.
 
With the amount of cranes dotting the Melbourne skyline I'm surprised at the seeming lack of new/off the plan apartments listed on domain/re.com

There are tons of ads on re.com? :confused:

http://www.realestate.com.au/project-royal+elizabeth-vic-melbourne-600004211
http://www.realestate.com.au/project-brady+group+vision-vic-melbourne-600002055
http://www.realestate.com.au/project-australis-vic-melbourne-600005971

etc etc etc ...

Or are you saying there aren't any on your price range?


The Y-man
 
I want to spend under $250k, so I'm really only looking at shoebox stuff (Although not too depressing if I can manage it), which is fine as it'll fit my lifestyle (I work in the CBD and don't spend a lot of time at home generally).

I'll contact a few of these agents and see what's around, not many places seem to actually list a price so it's a little difficult to know what I'm looking at.
 
I notice many listings are listed exclusively as investment properties as they are in student housing buildings (Unilodge etc). What's to stop me telling the tenant to hit the bricks after their contract is up and living there myself?

The managing company will ask for proof of enrollment from memory.


Any good guides on reasonable owners corp / property tax / other outgoings I can expect with apartments? I'm trying to get my head around the right questions to ask.

Yep, finding the questions is *much* harder than getting the answers :)

So here's some questions for you;

- Will the bank lend me money for this purchase? For your Unilodge example above for example, MAYBE 60% of the pruchase price - so you need to come up with a 40% deposit :eek: Often based on size, so getting an 80% loan on a studio anywhere in Melbourne might be a struggle.

- Will the valuation come up to what I need for a loan? You might pay $250k for a brand spanking new apartment, but the bank might think it's only worth $200. You have to come up with the shortfall or you get sued by the developers.

- What extra do I need to spend? Brand new aprtments come with a surprising shortage of stuff - like no blinds, no cooling/heating, no light fittings, no doort stops, no phone conneciton, etc etc etc - can ad thousands to your purchase price. Be prepared to spend (pre-loved places have all these installed by your previous owner)


As to your good quesiton re outgoings:
- For pre loved places, just look on the section 32 (available form the selling agent) and it will tell you outgoings.

- For BRAND NEW places, they will provide you with an estimate. Double or triple it to get a real figure. It is not unusual to get outgoings for an apartment in inner melbourne with a swimming pool, lifts, gyms etc to go into thousands of dollars (like $5k+ per year)


Anyway, if you still want new, maybe something like this?
http://www.realestate.com.au/project-bellview-vic-preston-600006091

The Y-man
 
LSM,

How about (again if you want brand new), something a bit further out?

http://www.realestate.com.au/property-unit-vic-epping-117957879

Handy to transport, stuff all outgoing (owners corp will probably just be insurance for the common driveway - a few hundred bucks a year?)

Bigger than a shoebox, so I think getting a loan for it will be ok, and close to rail, bus, and big shopping centre

http://www.realestate.com.au/property-unit-vic-epping-117957879

The Y-man

*warning* - I own property in the area so I could be talking the area up!! :D
 
A large part of wanting to live in the CBD is reducing my commute, I work 50m from Flinders St station so I'd like to be within walking distance, or within a few mins walk of the free tram zone. I'll look at North Melbourne too.

I won't worry about new places if there isn't much that fits, just thought it'd be a decent place to start for due diligence purposes.

I'm really looking for the type of place that most people would scoff at living in, literally a studio with enough space for a bed, a desk, and a kitchenette if that's all can afford. Doesn't worry me.
 
A large part of wanting to live in the CBD is reducing my commute, I work 50m from Flinders St station so I'd like to be within walking distance, or within a few mins walk of the free tram zone. I'll look at North Melbourne too.

Fair enough.

So something like
http://www.realestate.com.au/property-apartment-vic-melbourne-118855151
http://www.realestate.com.au/property-studio-vic-melbourne-118753495

As above, at sub 30 sqm, you'll need to have almost the full asking price as cash (assume no loan)

The Y-man
 
What are the situations where higher deposit requirements would apply, and what's the rationale behind it? I would not be interested in a investment property, I'm looking for exclusively owner-occupier.

Edit: I've just done a bit of research on this, interesting stuff. Seems like it's due to insurance issues, and a negative perception of the resale potential among other things. If needed I can rustle up a bit more cash, but for a $250k apartment at 40% deposit, that's $100k. Somewhat prohibitive for a first time buyer. It appears some lenders will go lower though, need to do a ring around.

The actual sqm of the property seems to be a significant factor, it sounds like 50sqm+ and it returns to relative normality.
 
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LSM, do keep in mind you can do similar to what we did - rent where you want to live, and invest elsewhere.

In other words, keep renting a tiny studio in the city next door to work, but own and rent out a house on a decent block in the outer suburbs is an option you should keep in mind.

The Y-man
 
That is something I will look at, I hadn't really considered it to be honest. How does the math work out on that?

Back of the envelope stuff incoming: Say I borrowed $250k for a subdivided place in Epping, I am assuming the repayments on that are going to run $1500 a month, vs $1200 in rental income. So I should expect a shortfall there right? It sounds manageable though.
 
That is something I will look at, I hadn't really considered it to be honest. How does the math work out on that?

Back of the envelope stuff incoming: Say I borrowed $250k for a subdivided place in Epping, I am assuming the repayments on that are going to run $1500 a month, vs $1200 in rental income. So I should expect a shortfall there right? It sounds manageable though.

Let's compare apples with apples (sort of)

In both cases, let's look at a $250k property, with a 20% deposit (ie. borrow $200,000 at 5% pa interest)

Option 1:
Buy CBD pad.
Pay $250 pw = loan repayments ($10k interets only) + outgoings ($3k pa)

Option 2:
An Epping 1BR: rent out for $240 pw (assume 4 weeks pa vacancy, 15% for PM fees, rates and outgoing) = about break even (out of pocket $4 per week)
On top of this pay $290 pw in rent for a city pad.

Now on the surface, sounds like craziness, because you would be apparenlty better off just buying the cbd pad. The question is, which one will have BETTER CAPITAL GAIN?

If the outer sub's growth is going to out perform the CBD's by $40 per week = 0.8% pa then you're better of renting in the CBD and buying the IP.

Also rememebr that being an IP owner, you can claim depreciation on the Epping property.

The Y-man

p.s. did this in a hurry late at night so ma be errors in there - but you get the drift.
:)
 
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