PPOR with good capital growth- Mel

[Cheesedc]

Hi everyone,

This is my first post, I would really appreciate some advices on my situation here.

Income - combined salary income of 180K before tax

Property1

valued 370-380K. Still owe 230K on interest only repayment, rental income $430 pw, minimal vacancy over last 5 yrs.

Property 2

valused 480-500K. Still owe 330K on P+I repayment, currently owner occupied, could potentially achive 370-380 pw.

Currently have 160K sitting in offset account on property 2.

Both properties are in Mel metro area.

My partner and I both turning 30 this yr, will want to start thinking about building a family and have kids.

I'm considering to purchase property #3. Definitely looking at buying a house with good size land. First to rent out, as we are quite happily living in property #2, then to move into later as the family expand. We want to start looking and planning now as if the property prices continue to rise, we may get priced out of the affordable area.

My first question is quite a silly one: Do you all think it's a good time to buy in Mel? I don't believe the property price will crash (drop by 30-50% etc), however, there are correctional and quiet period in the market (like 2012). Do you think the market will continue to rise in this crazy rate?

My second question is: Within 25km radius of CBD, which area/suburb/direction has the best CG potential and is also a good area to live in/raise kids. Given my portfolio, I'm setting my budget at max 650K.

Any suggestion is welcomed. Thanks in advance.

 

[Spades]

Hi Cheesedc,

Mulgrave,Springvale North,Ringwood,Ringwood East and draw a line down to Rowville with suburbs in between.Ringwood to Rowville bare in mind 30kms.

Don't know if you want a train line but only suburb mentioned that has a trainline is Ringwood.

 

[Cheesedc]

Thank you, Spades. Appreciate your input here.

Train line is not necessaryfor my family. I haven't used any public transport regularly in the last 8yrs. But I can see it may be a bonus when I try to rent it out.

 

[Rickardo]

You'll get more house for your buck going north or west rather than east or south east, but depends which area you want to live.

My opinion is the Melb market isn't too overvalued atm, I'd be comfortable buying a PPOR long term.

Another tip, are you considering keeping property #2? If so switch over to interest only, to maximize tax deductions later and minimize your non deductible PPOR mortgage later

 

[Spades]

What suburbs Rickardo?

 

[Cheesedc]

Thank you, Rickardo.

I don't know too much about the western suburbs. Which ones in ur opinion are good for PPOR and raise children?

Thanks for the tip on property #2.

 

[Spades]

Cheesedc,Have a look in the western suburbs and see if you want to live there.

 

[albanga]

Thank you, Rickardo.

I don't know too much about the western suburbs. Which ones in ur opinion are good for PPOR and raise children?

Hey Cheesedc I live in Melbournes North West (Niddrie) and cannot recommend the area enough. Just a few reasons (This is not an East Versus west debate either people! )

* CityLink on your doorstep. I drive into work (Lonsdale St) in peak hour and it takes at max 25 minutes. On weekends I can be at work in 15.
* For that proximity to the city in the East you would be paying a lot of money. For 650k in Niddrie, Airport West you can get a fairly new modern home.
* I know you do not use it but plenty of public transport options such as trams, buses and trains all taking you directly to the CBD.
* Not sure if you are a jet setter but the airport is 10-15 minutes away.
* Plenty of great schools in very close proximity. Essendor grammar, St Bernards, AveMaria, St Columbius.etc. All these are great private schools with great reputations.
* Keilor Rd has really good restaurants and is developing quite rapidly with new cafes, shops, restaurants opening all the time. Highpoint shopping center is only 15 minutes away.

 

[MelbInvester]

Hi,

I live in Glen Waverley and like to invest in here thinking in long term.
But bit hard to find anything in $650K with bigger land. But if you build the new house in GW, you can sell it very easily around 1.5-2.0 Mil.( Last 12 months is going crazy in here)

Again, you may find some around Wheelers Hill, Wantirna South, Forest Hill
area. My preference always in South East. ( Burwood East/Vermont South /Blackburn South/ Forest Hill/)


MI

 

[Jaggannath]

Hey Cheesedc I live in Melbournes North West (Niddrie) and cannot recommend the area enough. Just a few reasons (This is not an East Versus west debate either people! )

* CityLink on your doorstep. I drive into work (Lonsdale St) in peak hour and it takes at max 25 minutes. On weekends I can be at work in 15.
* For that proximity to the city in the East you would be paying a lot of money. For 650k in Niddrie, Airport West you can get a fairly new modern home.
* I know you do not use it but plenty of public transport options such as trams, buses and trains all taking you directly to the CBD.
* Not sure if you are a jet setter but the airport is 10-15 minutes away.
* Plenty of great schools in very close proximity. Essendor grammar, St Bernards, AveMaria, St Columbius.etc. All these are great private schools with great reputations.
* Keilor Rd has really good restaurants and is developing quite rapidly with new cafes, shops, restaurants opening all the time. Highpoint shopping center is only 15 minutes away.

Agreed, don't spill the beans too much! Also, if you want to send your kids to PEGS I hope you can afford $25k/child/yr.

 

[albanga]

Agreed, don't spill the beans too much! Also, if you want to send your kids to PEGS I hope you can afford $25k/child/yr.

Yes but given the sporting talent that the school has produced you can consider it an investment as your rich sports star kids can fund your retirement

 

[Jaggannath]

Yes but given the sporting talent that the school has produced you can consider it an investment as your rich sports star kids can fund your retirement

Produced or bought (via scholarships)?

 

[Beanie Girl]

For your budget of 650K, besides Niddrie (which is already going above that figure except for small houses), you can look at Oak Park, Pascoe Vale, Pascoe Vale South, Hadfield and Glenroy. Your best chance to attain a house at that budget atm is in Oak Park, Hadfield and Glenroy. Good Luck!

 

[pieman]

Hi,

I live in Glen Waverley and like to invest in here thinking in long term.
But bit hard to find anything in $650K with bigger land. But if you build the new house in GW, you can sell it very easily around 1.5-2.0 Mil.( Last 12 months is going crazy in here)



MI

So why don't those people with 2m buy in Brighton or something. Living out there for that 2m seems nuts.
How about footscray, seaford area. Both have PT, my number 1 investment criteria

 

[albanga]

Produced or bought (via scholarships)?

Ah Touche!

 

[Rickardo]

Thank you, Rickardo.

I don't know too much about the western suburbs. Which ones in ur opinion are good for PPOR and raise children?

Thanks for the tip on property #2.

I don't know enough about the West and North to give an informed opinion - but would agree with previous posts that if you're looking East you might be able to find something in Ringwood within your budget (might be stretching though). Just over 25k's out and would be a nice place for a family.

For example, take a look at these two

 

[strongy1986]

So why don't those people with 2m buy in Brighton or something. Living out there for that 2m seems nuts.
How about footscray, seaford area. Both have PT, my number 1 investment criteria

Because they are Chinese and like living around other Chinese

Having said that my mate who lives in brighton has been away working for a couple of years and can't believe how popular Brighton is with Asians now

Maybe that's just a sign of the times though?

 

[Jaggannath]

Out west of Melbourne it tends to expand almost concentrically. Unfortunately you're a tad late for the most recent gentrification, it's happened in most of the inner (Footscray, Maidstone, Seddon, Williamstown) areas, though there are still opportunities to be found. It may also be worth considering the Sanctuary Lakes area or Williams Landing, as they're supposed to be fixing the traffic disaster that involves 45 minutes to drive 5km, so it may become more attractive to people.

 

[willister]

Because they are Chinese and like living around other Chinese

Having said that my mate who lives in brighton has been away working for a couple of years and can't believe how popular Brighton is with Asians now

Maybe that's just a sign of the times though?

GW is mainly popular due to the over hyped GWSC (imho), a good strip of eateries in GW, decent blocks - 700m2 is not at all uncommon and the array of popular tuition centres there - very very valuable to the Chinese.