Hello Forumites ... what is the general opinion about the Frankston,
Cranbourne areas ?
Would the yields/ growth merit consideration ?
Thanks.
Cranbourne areas ?
Would the yields/ growth merit consideration ?
Thanks.
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Hello Forumites ... what is the general opinion about the Frankston,
Cranbourne areas ?
Would the yields/ growth merit consideration ?
Thanks.
Hi Cherry Pro
I just purchased my fifth property in Frankston. I have been closely monitoring the frankston market for a while and it has really started to pick up.. showing very strong growth at the moment.
Specially in the last 3-4 months, the market has become very buoyant and significant stock is getting sold before it gets listed.
There had been a lot of talk about the better / worse pockets within Frankston, however the price points in so called worse areas of Pines / Frankston North have gone up relatively quicker than central, Karingal or Frank South.
Almost every agent that I have spoken to over the last couple of months has mentioned that this is the busiest period they have experienced over the last few years.
WA investors are very active in the market and are picking up a lot of properties with half decent yields - Some of the first day inspections that I have attended had half a dozen people looking through the property at the same time.
I have also been speaking to a few licensed valuers who have confirmed the sudden upward movement in the market. My valuer at Market line valuers (who do more than 80% of the valuations for the banks) mentioned that he has stopped benchmarking new valuations against anything that is more than 45 days old.
The frankston by-pass is 10 - 11 months ahead of schedule and is expected to open late this year instead of next year. There is also a lot of new development happening around Yuille/ Kars St in Frankston South and majority of new town houses are priced in excess of $450k.
Hi Harris,
Your post has just made my day! I have two IPs in Karingal - bought last year and year before. Was about to give up on them as I've had a little bit of tenant trouble. (Tenants behind in their rent). Wanted to sell up and re-invest in the inner established suburbs. (Within the 10km radius). Based on the information in your post sounds like I should wait for a few months what do you think?
Regards Jingo.
Hi Harris,
Your post has just made my day! I have two IPs in Karingal - bought last year and year before. Was about to give up on them as I've had a little bit of tenant trouble. (Tenants behind in their rent). Wanted to sell up and re-invest in the inner established suburbs. (Within the 10km radius). Based on the information in your post sounds like I should wait for a few months what do you think?
Regards Jingo.
Hi Harris,
Thanks for the reply.
Looking at your avatar sign of "Long term investor", I am surprised that you would not give your properties a good 5 year period to guage the actual performance.
Oops........ I have betrayed my avatar! My investments in Frankston were based on research I did on the area at the time (2005). Really the main reason I bought into Frankston was to be in a position to benefit from the completion of East Link. The completion of which is drawing near, and it sounds as though some growth is occuring in the area. I am just being impatient and would usually give my investments a lot longer to 'mature'.
I would not get disappointed in my properties if they didnt move for a single year.. Without having any knowledge of your particular circumstances, you would have incurred stamp duty and other buying costs for these prop, you would be paying for selling costs and then having to pay stamp duty and legals etc all over again (on lower inner suburb yields) in order to expect better cap growth..?
Yes, you are correct about paying stamp duty, etc, etc on the IPs. Would need to accept lower yields (in terms of %) if I re- invested in the inner city, but would be willing to do this to achieve superior capital growth. (10% + p/a).
As a side note - I do have properties in the inner suburbs and have experienced great capital growth with no tenant problems. (Currently have issues with tenants in Frankston at the moment).
I would suggest that you call as many agents as possible in Frankston on a week day and have a good chat to them about what the market is currently doing. Call half of them wearing seller's hat wanting to sell your prop in Karingal and then as a potential buyer looking to add to your current portfolio. You might be surprised with what they tell you about the current market conditions (and obviously come back and post your feedback on the forum).
I will take you up on this. I had a conversation with the agent who is managing my IPs about Frankston's prospects. He has faith in the area, and is currently buying IPs himself. (I trust that he is telling me the truth about this - I believe him to be honest, and besides he could just as easily have told me to sell so that he could take the listings. )
There is an acute shortage of rental stock in Frankston. One of the prop I recently bought had what I thought was overly optimistic rental appraisal by the agent, however a new tenant is lined up even before settlement wanting to pay 15% more than the already ambitious rental appraisal..! (and that prop is in Karingal as well).
Yes, I have spoken with my rental manager. She has reassured me that if I need to move my tenants on (who are not exactly ideal), that there are plenty of tenants out in the market at the moment.
If nothing else moved, the upward rental movement should in itself be sufficient to create enough pressure on the capital value of the properties and thats what is happening in most inner suburbs as well.This is happening in the inner areas.
Hopefully will spread to other areas such as Frankston.
Have you thought about perhaps adding a one bedroom granny flat/ self contained units at the rear of one of your propeties..? Currently, the going rental is about $150/week for one of those and if you do your numbers, you might be surprised at the net cash flow position for that property.
Great idea. Will look into this too.
I shall post again once I have contacted the agents and let you know what they said!!!
Thanks for your information.
Regards Jason.
With Frankston having a recent rapid increase is there any value in looking at the fringe suburbs such as Baxter, Carrum Downs, Somerville etc?
Any thoughts appreciated
Thanks
PP
Hi Jingo
What I meant by suggesting to call agents was to call atleast 20 + agents (not the agency itself but real estate agents on their mobile numbers).
If you wanted a relatively reliable data statistically, you would need to call as many agents as possible and ask roughly similar (some open ended and some closed) questions and get their opinion.
That would mean calling 4-5 agents from similar agency. Easiest way to do would be to do a general search on real estate or domain for frankston properties and then asking the listing agent a question or 2 about that property and then digress towards asking questions relating to sales activity, market direction, better or quick selling pockets, trend over the last 3- 6 months, price point movements, average selling time, adjoining areas growth etc.
Then find the common theme amongst all the feedback that you are receiving. If 18 out of 20 agents tell you that this is the busiest time for them over the last few years (2-3 years) then you know that there is more to the local market then a relatively small increase in activity.
You cant discount MPRE only because they are bad property managers. They have 3 estate agencies in Frankston and by far the largest in the area. They have tens of agents employed, so you can ask those agents rather than leaving a call back message for the agency.
The key is to pro-actively seek opinion from a large group of individuals and find common message amongst the feedback. If possible, call a few agents in Seaford, Carrum as well.
Also to add that within Karingal, you can buy a 3 bed house for $220k and within 100 metres pay $300k for the other. What you are referring to for a standard block with a standard house is too subjective.
(Also happy to post info on my 5 purchases in Frank as well as 3 that my brother in law have purchased to get some real data in the mix)
Good luck
Harris