Off the Plan vs Older style apartment

Just wondering what people see as the better option for a first home buyer, wanting to buy a one bedroom apartment to live in, then to eventually rent out.

Buy off the plan with the stamp duty savings and first home buyers grant

vs

And older style apartment with a smaller first home buyers grant, but something I could renovate and add value to in time.

I am looking in Melbourne.

This is all new to me so am suitably confused :)
 
You just need to change the wording slightly.... :)

Buy off the plan with the stamp duty savings and first home buyers grant and possibly pay up to a 30% premium, and possibly have issues getting finance for it on completion, and have no real idea what the outgoings are going to be

vs

And older style apartment with a smaller first home buyers grant, but something I could renovate and add value to in time and be able to look at OC AGM minutes and see outstanding issues and have an accurate idea of outgoings, see what the views are like, see what the neighbourhood/neighbours are like .

But hey, this is a bit biased :D

Cheers,

The Y-man
 
Alladin

Will translate Y Man's for you

Off the plan: Opportunity to loose money

Older Style: Opportunity to make money

In saying that this thread has been covered too many times ( nearly as many times as ( Is Frankston a good investment). You won't find a lot of people on here who do like off the plan for apartments as although the REA/Developer will show a great power point presentation showing you depreciation, tax savings & rent guaranteed. They will never show you the one that has: there mark up, true rent for the area, outgoings each month, sink funds required etc etc.

Jezza
 
Aladdin,

my first IP was an OTP and I guess I was lucky as it turned out exactly as I imagined, it valued up to the purchase price and I got the rent and the depreciation I thought I would get.

While it is still a great IP and I will keep it - I tend to agree that it is less risky to buy something you can look at today, rather than hope the building comes out as promised by the various parties you will have to deal with.

Additionally with the OTP you won't know when you will be able to settle as you / your seller will have to deal with councils and their approval processes for the various steps involved. A 6 months timeframe became a 14 months cycle with my OTP (which worked great due to the GFC, but that was pure luck).

- Void
 
Buy something you can renovate and increase the value of the property that way, also buying something second hand may mean you can afford a place in a better area then a new place.
 
Just wondering what people see as the better option for a first home buyer, wanting to buy a one bedroom apartment to live in, then to eventually rent out.

Buy off the plan with the stamp duty savings and first home buyers grant

vs

And older style apartment with a smaller first home buyers grant, but something I could renovate and add value to in time.

I am looking in Melbourne.

This is all new to me so am suitably confused :)

Buy an older apartment - and renovate. OTP was OK 10 years ago but now it's just too expensive to buy off the plan.
 
Thanks for your advice everyone it is really appreciated.

The thing i cant get my head around is some of the OTP apartments are in good locations ie funky parts of the city with all new appliances etc for the same price as an old apartment that needs work and sometimes further out.
Size of the older style may be a little bigger, but with the stamp duty savings etc on an OTP it makes it a more viable option.

But I get what people are saying it is safer to see what you are getting as apposed to the unknown.
 
Thanks for your advice everyone it is really appreciated.

The thing i cant get my head around is some of the OTP apartments are in good locations ie funky parts of the city with all new appliances etc for the same price as an old apartment that needs work and sometimes further out.
Size of the older style may be a little bigger, but with the stamp duty savings etc on an OTP it makes it a more viable option.

But I get what people are saying it is safer to see what you are getting as apposed to the unknown.

which ones are these in the city? old apartments with new ones... with similar or same prices?
 
Unknown outgoings (strata fees etc) can be a big surprise when SP's are lodged and fees set. Also try to overlook the "gloss and glamour" of some of the new apartment fittings and fixtures and concentrate on the floorspace instead. I'm not saying don't consider new or OTP, but make sure you do your homework and compare like with like.
 
The thing i cant get my head around is some of the OTP apartments are in good locations ie funky parts of the city with all new appliances etc for the same price as an old apartment that needs work and sometimes further out.
Size of the older style may be a little bigger, but with the stamp duty savings etc on an OTP it makes it a more viable option.

It might be easier if you let us know the ones you are referring to, firstly size does matter not just to you but to banks.

That fact that it needs work should immediatley trigger a opportunity if you buy at the right price you can add value.

Don't listen to a sales rep or be sold on the display suite. As you do not really know what you are getting I would imagine you would have atleast 50 questions you would want answered.

An example I know of would be I know someone in a older style apartment in Richmond because the walls are double bricked he would not even hear a drum kit being played as oppose to some of the new ones in Sth Melb & Docklands where the walls seem like as thick as a peice of fibro sheeting and you can hear everything your neighbour on both sides and above and below are doing
Jezza
 
Thanks for your advice everyone it is really appreciated.

The thing i cant get my head around is some of the OTP apartments are in good locations ie funky parts of the city with all new appliances etc for the same price as an old apartment that needs work and sometimes further out.
Size of the older style may be a little bigger, but with the stamp duty savings etc on an OTP it makes it a more viable option.

But I get what people are saying it is safer to see what you are getting as apposed to the unknown.


hey aladdin

i had the exact same mind frame.

I thought OTP is the way to go, but having come across this forum i think its a bit risky.

i also agree with the locations and style that OTP potray but i think we need to be more aware of the price and space. I am starting to see that the prices are a bit too high and that after a year or two when completion is ready we wont see the 5-10% rise each year.

i wish you all the best
 
i recently put an offer on a place subject to finance for 500K - total size is 107sqm next to crown - whiteman st less then 3 minutes walk to crown. 2 bed 2 bath - Although on 2nd floor - if compared to off the plan which are sold at 620K - stamp duty is ard 20K still better off. And it has tenants too at 470 per week increasing to 520 per week.
 
jcwc888

5% does not seem that flash but each to there own. What is your complete return on investment before tax once you include all outgoings ( Insurance, leveies, PM'S etc) and then what is return on investment after tax once you include ( depreciation, interest etc)

Jezza
 
jcwc888

5% does not seem that flash but each to there own. What is your complete return on investment before tax once you include all outgoings ( Insurance, leveies, PM'S etc) and then what is return on investment after tax once you include ( depreciation, interest etc)

Jezza

i'm a bit of a flipper jezza... so i don't really see that 5% return except CG after i sell.
 
Don't forget a lot of OTP have big fancy every things pool/gym/lifts.
and these usually attract big strata to look after.
I always look for older units with no lifts no pool/gym and an easy well maintained garden
which come with low strata something a first home owner should look for.
 
Don't forget a lot of OTP have big fancy every things pool/gym/lifts.
and these usually attract big strata to look after.
I always look for older units with no lifts no pool/gym and an easy well maintained garden
which come with low strata something a first home owner should look for.

I will take an unrenovated art deco apartment (low-rise) any day than a goliath OTP apartment that probably reaches beyond our stratosphere! I would hate to pay the $5-6K annually increased body corp fees not to mention the scarcity value of art-deco apartments (they will never be built like that anymore).
 
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