Opinion on this property

M

MohanWei

Hello all,

Myself being very new in the investment market, can any one help in understanding what might be a good buy for the below property. I am planning to inspect this Saturday. It is listed for around 260K only there in the market for less than a month. Potential rent can be around 260 per week.

http://www.realestate.com.au/property-house-vic-sebastopol-107523606


If anyone has better property in terms of good investment in Ballarat or Bendigo, please let me know as well.

Thanks in advance.

Regards
MohanWei
 
There is some nice furniture in there. That's the only thing that came to mind while looking at that place.

Why are attracted to this place? What do you hope to gain by buying it?

I suppose it would be ok for a set/forget option.
 
MohanWei said:
... can any one help in understanding what might be a good buy for the below property.
Click to expand...

Basically for me, it would be a case of - how long does it take to sell, and how much did it sell for.

Go to the inspection, get a "feel" for the property, get the S32 (sound interested!), check out the basics (no easements under driveway for instance).

Once you have got the s32, see if the agent hounds you every 5 minutes from then on (cold market - can buy cheaper) or ignores you completely (hot market - prices are high).

If the agent doesn't call you, and it sells before the next open for near the asking price - hot market, and you could be paying more than you would at other times.

The Y-man
 
@locko24 - My strategy is set and forget. See if there is any improvements in a regular interval of may be every year or so. It s looking in the photo (I know good furniture will attract everyone, just like me). But I will make my call once I see the property after inspection and Section 32.

@The Y-man - Thanks lot for your input. Its see how it really look when I inspect. Considering this property listed only recently, agent may not be too eager? Lets see
 
FWIW, API mag gives the latest median for Sebastopol as $220,000, with rent of $250 a week.
That makes this a top end property for the area ... One of the rules I have heard is that you are better to aim for something around the median. It helps to ensure you don't pay too much and, also, that it's more attractive in tough times (i.e if there are plenty of vacancies).
Sebas is a lower socio-economic area, and $260k is closer to the median for the wider Ballarat area.
This is just my 2 cents worth ... but it could be food for thought :).
p.s, do some more research. It might be a little under-rented at $265 a week - which could mean it's not worth $260k, or that you could raise the rent if you did buy it.
 
Nice house

This is how I work it out to see if it is a good buy. Everyone is different. The cost is $260,000 more with stamp duty but lets go with this figure. Divide 7 into 26 and times that by $125 to determine roughly the repayments. So 7 into 26 gives you is nearly 4. 4 times 125 is $500. Minus rent of $265 from $500 and that gives you what will be taken from your pocket each week. $235 is what you contribute each week roughly. Are you prepared for that? Is that the best you can do? In the current market things won't change much at all. Don't forget too I am being conservative b/c the mortgage will be bigger and additional charges will also make it more expensive. Up to you.
 
You can get a house on similar if not bigger land in some outer suburbs of Melbourne (though possibly a little older) for that price. Yield will be similar.

A regional property may be good if it offers better value or yield than something nearer a capital city, but does it in this case?
 
mmmggg said:
Divide 7 into 26 and times that by $125 to determine roughly the repayments. So 7 into 26 gives you is nearly 4. 4 times 125 is $500.
Click to expand...

I dont understand this maths sorry? $500/week is $26k p.a. or 10% of the purchase price - why is that the rough repayment?
 
With an loan interest rate of 7%, assuming $1500pa outgoings, zero vacancy, zero depreciation and a 40% marginal tax rate, the after tax yield on the current asking price is 4.53%.

You also would be out of pocket $128 pcm based on these assumptions.
 
What the others have said, (especially the Y-Man's), and I can give you some Victorian Valuer General stats for median price (Sebastopol) for 1994 was 75,000. By 2005 it was $173,000 so averaged out growth p/annum was b/w 8 and 9%.

-By 2008 median house price: $200,000, and again the averaged out growth p/annum for decade of 1998 to 2009 was 9.7%.

-Land block changes in the decade of 1998 to 2009 went from (median) $24,760, to $75,000, an averaged out growth of 11.7%. (Yes, Sebastopol specifically).

I like that it is 'nearby' the secondary college and also not far from sports centre, but what Y-Man said, you are the boss of your deals, funds, bidding, when you make an offer, how much...'You're the Boss!'.:)

What suits you, and hope it goes well.

I'll be in Ballarat tomorrow too. (Not Sebastopol).
 
What's the strategy? It won't put cash into your pocket (although depreciation should be good). So are you after CG? If so, remember this one is right on the edge of town.
 
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