One nice property or multiple not so nice properties?

Hi,

this is my first time post and am throughly confused so I thought I would post a question here.

I am new to the whole property investing and am a fork in my wealth creation strategy.

I am currently living in a unit in Noble Park and am looking for my upgrade. I purchased land in Point cook as it seemed to booming and in my budget. I was planning to keep my existing unit in Noble Park and construct a house. Unit in Noble Park is about 300K, Point cook will come to about 650K with luxurious house.

Now question is do I sell everything land and unit and go to a 'nice' suburb like Balwyn, Kew, Camberwell (I realise these have been driven up by foreign investors), OR do I do a build basic house in point cook and buy another investment property on top OR do i just stick with the original plan.

Any advice would be appreciated and thanks for reading my post!
 
What are your goals? What is your exit strategy? What is your timeframe?
If you have a goal of living in a nice house, and downsizing and living off the proceeds when you retire, then Balwyn it is. If you want to retire on rent from a property portfolio, then there are diferent strategies....
 
What are your goals? What is your exit strategy? What is your timeframe?
If you have a goal of living in a nice house, and downsizing and living off the proceeds when you retire, then Balwyn it is. If you want to retire on rent from a property portfolio, then there are diferent strategies....

I am not after short term gains, I am prepared to hang onto to anything for atleast 10 years. I have a young family so I haven't really thought about my retirement strategy but one of the main reasons I like balwyn is the high school. I know it is quite competitive but I figure it better than paying 20k+ for each child to go to private school with no tangible returns (hence the competition. However a nice house in balwyn is way out of my league. It will be a 'basic' house. That I may rebuild in a few years...
 
Seeing as it is for yourself, YOU need to be comfortable with the decision - where do YOU want to live?


The Y-man

I think this pretty much sums it up.

Im in a similar position, looking to buy a house, weighing up the whole rent vs buy issue etc.

Doing the numbers it makes more sense for me to buy cheaper properties and get as close to being neutrally geared as possible and renting in a suburb I want.

That said, those are not any areas I want to live in and while I know it is possible to rent in areas I want to live in, its simply something I am not comfortable with. I dont like the idea of being kicked out because the owner wants to renovate / move in / sell / etc.
 
Well in that case, why not take the plunge and go Eumemerring? :D

The Y-man

lol......that 'change the name of the suburb before ppl actually know where it is' trick almost worked for me.....:D

Well I guess it all comes down to the bank.....lets see what figure they come back with........but would have loved to live in balwyn......but i feel a million is like nothing there!!
 
Balwyn HS is in Balwyn North not Balwyn. Balwyn N is cheaper especially streets between Doncaster and freeway. However, check the school site for the zone...eg only in between Severn and Greythorn.

Cheers, Tracey
 
Pravvy

Noble park to Point Cook to Balwyn gee you seem to like to see all corners of Melbourne. A house in Balwyn I think you will have greater compound growth ( someone here will have a chart to prove me wrong but this is a opinion) than both of the other 2, in saying that I don't think a mil is going to get you into Balwyn, you might have to go to Nth Balwyn, which is just as good.
Jezza
 
........but would have loved to live in balwyn......

I guess what I am trying to undertsand is "why?"

Is it because it is more convenient to work?
More public transport?
Less donuts?

What is it your heart seeks?

By the way, I misread your first post - I missed the fact you already have land at Pt Cook. I now undersatnmd that makes the decision process a lot tougher, as there are all sorts of additional considerations such as selling/holding costs etc.


Cheers,

The Y-man
 
However a nice house in balwyn is way out of my league. It will be a 'basic' house. That I may rebuild in a few years...

Would go down this option rather than the mansion in Point Cook. You'll get an average block in say North Balwyn for around $950k (1940's-1960's house). It will be all land, free house (until you can rebuild). Balwyn starts at about $1.2m.

Agree about Balwyn High, that could be a great option for you. The zone includes parts of Balwyn and North Balwyn.
 
Yes I know I am bit all over the place. PI is not something that we were thinking about as with one income and one dependant there was not much room for investing. however due to a change in circumstances (good changes! :D) we am fortunate enough to start investing. Thus stumbling upon this forum, I am trying to work out what investment strategy will work for us.

As soon as this change occurred we went for the first opportunity that presented itself. The Point Cook land. It was appreciating at a phenomenal rate i thought it would be a good idea. However now that we have a a few months of waiting for it to settle and time to think about building and the cost involved, we are questioning the idea.

Both hubby and I were quite emotional about the whole 'building your dream home thing' at the start but the more we got into it, the more we realised that we were thinking with the heart not the head. The house we want to build is now coming to a total bill of about $650K. We had planned to keep the Noble Park property as it won't cost us much to keep. It will be a bit of stretch for us but not unbearable. But after talk to a few people and also spending hours reading this forum I am not sure if it will appreciate after we build given there is still land over there.

Then the Balwyn idea came up. Balwyn is probably more of a concept rather than actually buying in Balwyn. Balwyn is an example of what it is that we wanted. It is a premium area, closer to the city (no further than 25km! Yeah that's considered close in my books) with good schools and also has good compound growth. Balwyn is probably one example of it. Glen Waverley is another option that we are considering. However I think both these will strain us (maybe it is not going to be that difficult but it is scary as it will be our first PI or investment move!). Also thanks Jezza, Tracey and Paul for the tip about Balwyn North. I will look into it.

I guess at the end of the day how much is too much? What percentage of your income would you invest into your PPOR and PIs when you are just starting out? And also I just jump to the 'nice expensive' house now or build up my portfolio and make my way there? We are a young family so I am glad that we were smart enough to buy what we could afford and avoid being a FHB now!

Sorry for the long post and hope you all don't get annoyed by the newbie questions but I really appreciate the advice and patience that you all have give so far. I am in a really confused state at the moment! :)

Thanks everyone!

Praveena.
 
As soon as this change occurred we went for the first opportunity that presented itself. The Point Cook land. It was appreciating at a phenomenal rate i thought it would be a good idea. However now that we have a a few months of waiting for it to settle and time to think about building and the cost involved, we are questioning the idea.

Both hubby and I were quite emotional about the whole 'building your dream home thing' at the start but the more we got into it, the more we realised that we were thinking with the heart not the head. The house we want to build is now coming to a total bill of about $650K. We had planned to keep the Noble Park property as it won't cost us much to keep. It will be a bit of stretch for us but not unbearable. But after talk to a few people and also spending hours reading this forum I am not sure if it will appreciate after we build given there is still land over there.

Then the Balwyn idea came up. Balwyn is probably more of a concept rather than actually buying in Balwyn. Balwyn is an example of what it is that we wanted. It is a premium area, closer to the city (no further than 25km! Yeah that's considered close in my books) with good schools and also has good compound growth. Balwyn is probably one example of it. Glen Waverley is another option that we are considering. However I think both these will strain us (maybe it is not going to be that difficult but it is scary as it will be our first PI or investment move!). Also thanks Jezza, Tracey and Paul for the tip about Balwyn North. I will look into it.

I guess at the end of the day how much is too much? What percentage of your income would you invest into your PPOR and PIs when you are just starting out? And also I just jump to the 'nice expensive' house now or build up my portfolio and make my way there? We are a young family so I am glad that we were smart enough to buy what we could afford and avoid being a FHB now!

Sorry for the long post and hope you all don't get annoyed by the newbie questions but I really appreciate the advice and patience that you all have give so far. I am in a really confused state at the moment! :)

Thanks everyone!

Praveena.

One think to keep in mind is that a block of land with a new house on it is very unlikely to appreciate at the same rate as a block of land with a somewhat scrappy house on it. I think financially you won't do so well at Pt Cook but you get the lifestyle benefit of the new house. I guess the risk is of land at the fringe that if the gorwth doesn't keep up then moving to a desirable location gets harder and harder.

Personally I'd do the hard yards closer in. Glen Waverley is alot different to Balwyn (half the price?). I would think an old house there might be close to the Point Cook budget (I don't follow that suburb though personally though I do quite like it). 650k worth of land and a $0 house versus 200k land and 450k house?
 
^I agree with this. The Point Cook house itself will just depreciate; certainly not something that I would do. However, I would consider building a much cheaper house there to on-sell if the figures stack up. IMO the gap between Point Cook & Glen Waverley or whatever will get bigger rather than smaller. If it's possible to do it now I would do so. My sister stretched to get into Balwyn nth 10 years ago. If she hadn't done it then she couldn't afford to move there now. Granted there's been a massive boom over the decade but her house has appreciated by 3.5 times!
 
I would go the North Balwyn route. As you said, if you were already considering private school education for your child/ren then you are saving 20,000 pa roughly every year they are at the high school. Then you factor in the potential capital growth. Also, add in the growth of NB vs PC (and history shows that further in has better and more stable growth) then financially NB seems better. But, are you more likely to appreciate the community, resources and infrastructure of NB or PC, and what do they each offer? I think that when deciding on your PPOR you can look at the numbers, but you also need to consider all the other factors that come with it.
 
I don't know about a decent profit but I don't think I'll make a loss. I am fine with that as I would rather walk away from than invest more in it and then regret it!.

I am not thinking if I can't afford to live in North Balwyn/Balwyn maybe I just buy it and rent it out for the first couple of years. Is that a better plan? my kids are too young at them moment so when they are older we have a property there to move into. How is the rental market in that area?

Once again, I really really appreciate the advice and direction you all have provided me in the last few days. I thank you all for the help and paitence you have provide me......I would have given a virtual beer/champagne/any form of alcohol but i can't find the appropriate emoticon! :)

Praveena.
 
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