Option A or B which would you go for?

[Tsea]

Hi, just after some advice and opinions from people on here.
I have approx $500,000 which I am looking to spend on an investment property in inner melbourne, and are trying to decide between the 2 options.
A) 2 bedroom apartment in a suburb such as st kilda east/prahran/elwood, an older apartment in a small block
B) Newish townhouse in Maidstone, 2-3 bedrooms

Both would have rental yields of between 4-5%

Areas such as prahran and st kilda east have had very good capital growth, however I feel perhaps Maidstone may grow more?

My goals are to hold long term and capital growth

 

[Jake Milne]

Option A.

$500k can get you a reasonable 60's/70's apartment 2BR in St Kilda East but with this budget you'd have more choice with 1BR's when it comes to Prahran/Windsor/Elwood/St Kilda/Armadale etc. 1BRs are still good for these suburbs.

Make sure the apartment ticks all of the major requirements that the market demands like:
Strata Title,
R1Z,
>50sqm,
Car Space on title,
Outdoor space on title,
No expensive features like lifts/gyms,
North/East orientation,
Good aspect,
Dining area,
Separate toilet (not necessary for 1BRs),
Close to transport,
Close to shops,
Quiet Street
Active body corporate
etc.


Maidstone in the past has seen good spurts of growth but then lays dormant for years. Not the most reliable suburb when it comes to growing a portfolio, especially when it comes to apartments (townhouses fare better though). Not a big fan of this suburb; would look closer at Flemington & Kensington but price may be an issue here.

 

[GreyGhost]

If you were looking at a house in Maidstone with land then that would be preferable, as commission styled houses are getting ridiculous prices as developers swoop in. But to buy a townhouse there I think is a bit ahead of the time there. I think the money is made at the development stage and townhouse growth will not be that strong until some time later.

So in short, house in Maidstone worth considering.
Townhouse in Maidstone may see limited growth potential for some time as Jake said..

I'm not in a position to advise on apartments, but a
Pascoe vale presents good opportunities for purchasing a townhouse IMO, and you will secure something for 500k.

 

[cimbom]

I agree with Jake. I'd look at Kensington, Flemington or Ascot Vale before Maidstone.

 

[cadence]

Is it true that Maidstone is 8km from cbd but it takes 30min to drive (according to google maps)?

 

[Jake Milne]

I live in Prahran and it can take an hour to get to the city... All depends on traffic.

 

[jpcashflow]

Hi

Hello,

With $500,000 do you mean cash or borrowing capacity?

If you have the cash, why not look at buying two properties instead?

Cheers

 

[Tsea]

Hello,

With $500,000 do you mean cash or borrowing capacity?

If you have the cash, why not look at buying two properties instead?

Cheers

Borrowing capacity.. I am leaning towards a 2 bedder in st kilda east/balaclava. Growth there looks pretty solid and its more affordable than prahran/elwood for my budget

 

[Tsea]

What do people think of st kilda east/balaclava area for an older style 2 bedroom apartment?

 

[Pianissimo]

If only A or B, I'd pick B, Maidstone.

It got more land component and less supply.