Require help on my research

C

chris168

Hi all,

Like most newbies, like to introduce myself as a newbie.

Have been doing a lot of reading and researching on the net to prepare myself on my new career in property investment.

I've saved enough for a deposit and eager to go for it. The problem is ( as with most new newbies) .... where should I buy???? I'm based in Melbourne. Any help will be most appreciated.

I do understand that I need to do my own research which I have been doing for a long time. I have studied the demographic changes on different suburbs, development plans etc.....but my knowlege I've attained still will not allow me to sleep at night if I go for it. I have read alot of articles in this forum which thanks to all for your guidance. Basically, to stop myself from beating around the bush.... How do I thoroughly do a research on a particular suburb???? Where do I get my resource from???
Everyone say to talk to real estate agent but I find them to be very arrogant when you approach them. Maybe because I look too young or look like a bum with my streetwear clothings. Need to know where do I find info on last 5 yrs capital growth or % yield without paying for it??? Do I have to pay for everything???Went to the council but got knock back because I'm not a licenced company.

Any guidance with my research will be most appreciated.

Cheers,

Chris
 
Chris - excellent qn - i think the way you asked the qn should be an example for everyone

Hopefully you'll get some good info

API mag is good for past growth rates - Im also happy to look some up for you. (either by suburb or LGA)

Where to buy....

Do you want yield or K growth ?
Does your budget limit you to specific areas or building types ?

Thats a start ....
 
Thanks guys for replying.

XBenx,

I'm looking for a good yield but with potential k growth. Which suburb??? That's where I like to know.

How long have you been investing????? Don't really want to pride into your personal life but the reason I've ask is that I'm having difficulty to get started. Kyiosaki said he only invest in positive geared properties. What I like to know is with the current market, is it possible???

What is you opinion with high% Vacancy?? That also scares me.
 
G'day Chris,

This place is the only place I know that gives 5 years of CG - and it's free, but limited !!!!!

http://www.aussiehomeloans.com.au/AussieValuer.asp

Limitations:-

1. You are only allowed to make 5 requests per month (to the same email address ...)

2. It is only updated every 3 months (get in quick - I reckon the next update is due in the next 3 - 4 weeks, so you'll get an idea of growth within a short time by getting one now, and another early in May.... - I could be wrong, but I wouldn't bet on it :D )

Positives:-

1. It also includes the median yield for the postcode

2. It "splits" the medians into 3 sections (top 25%, middle 50%, and bottom 25%). In some ways, far more useful than one straightout median for the suburb.

Other thoughts:-

It appears to be somewhat "conservative" in its medians when comparing to Homeprice guide or others - but this could be because of the "3 monthly" updates......

Regards,
 
Chris,

I'm a little confused - is this your first property purchase? If so, why is it an investment property, rather than owner occupied?

Anyway, I don't think you can do positive or neutrally geared in Melbourne. Don't worry about what the American investors say about having to buy positively geared - the laws re negative gearing are different there. Many OZ investors have made packets from neg gearing. As long as you can afford the cashflow. Which is not to knock positive gearing. But, there is no question that many Oz investors have got rich with neg gearing and high capital growth.

With neg gearing, timing of purchase is, in my opinion, more important. I wouldn't be in too much of a rush in Melb at the moment. Just had the biggest boom since the war - history suggests that capital growth will be flat for a while (though this is just based on history of course). Even if prices don't fall, remember that when you are negatively geared you are going backwards unless you get capital gain.

As for suburbs: the biggest gains have always been in the most expensive suburbs - not rocket science. Think Kew, Hawthorn, Malvern, Armadale etc. Plus Bayside (St. Kilda, Elwood etc). Inner city (Richmond, Kensington etc) always good. Extending out to areas like Coburg and Preston to the North. Huge growth around Ascot Vale area. Other inner city Western Suburbs (Footscray, Yarraville) have shown good growth too (though Footscray is still a little rough). Western suburbs have been playing catch up.

And yeah, the vacancy rates scare the hell out of me - is one reason why I'm not buying quite at the moment. I think growth will be flat for a while and prices may even come down a little when interest rates go up and over geared investors leave the market. I agree that you shouldn't procrastinate for the sake of it, but we are at the end of the biggest boom for a long time (and Kiyosaki says not to buy at the crest of a wave but to buy into a falling market). A bit of procrastination right now might not be a bad thing.

Good luck

Gail
 
G'day Gail,

is this your first property purchase? If so, why is it an investment property, rather than owner occupied?
Click to expand...
Maybe Chris168 had read this thread from the old forum :D

http://www.somersoft.com/forums/showthread.php?postid=27592#post27592

And, for those that DO click on that link, remember that posted thoughts (about PPOR mortgages maybe not being Tax deductible when a PPOR becomes a rental) were refuted in a later article (my BFO post!!). So don't get too concerned about that issue...

Regards,
 
Chris
If you want to see how a suburb has performed good buying at $60 is "A guide to property values" data & analysis from the records of the Valuer General. It gives the price for the last 10 years. I have the prior book so I can go back 12-13 years. Western Suburbs over the last 12 months have been the minor boom area as it plays catch up. However after the boom is over the suburbs such good year to year increases wont be available.

However if you are after postively geared properties the West is nearly the last area that it can be done with rental returns around 6-8% still available but getting scarcer.

Other forumrites have referred to Aust. Prop Investor magazine as having house prices. Treat only as a guide as I find it very very inaccurate for many suburbs.
 
The "Guide to Property Values" is the best source for Victoria. Unfortunately, by the time it comes out, it is a little out of date. I found a copy at my local library a few years ago which was useful. We also have shared copies with friends which brings the price of buying it down.

You'll find the numbers are a bit different from the REIV's published in API & other places. This is because in Victoria, the state government only allows auction results to be published, not private sales. So the REIV data is auctions only. The Valuer generals data is all sales and so is more accurate. This may not matter too much if you are looking at suburbs with a high proportion of auctions.

I think you're on the right track looking at the data though. While not the be all & end all, it gives you a good basis for understanding the market overall and making sound decisions.

Good luck,
Sue
 
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