St Kilda advice.

[Compleks]

Hi everyone.
Been a while since I've posted, and as usual I'm after some help.

I'm looking to buy myself a place to live. My budget is under $300k and ideally I want to live in St Kilda, which limits me to small 1br apartments.
This doesn't bother me too much, obviously a bit of room to move would be nice but $300k doesn't go far these days.

So I'm after some current opinions on the area from an investment point of view.
Personally I love the area and spend a fair bit of time there. However, as a longer term plan (3-5year) I might consider turning my place into an investment property.

There is one place in particular I have my eye on. 1br apartment in a block of maybe 12 (guessing). I haven't been sent the section 32 yet, but the approximate area is probably 40m2 inside, plus a car park and a courtyard which I guess is about 8m2, maybe (I'm not good at guessing sizes).
It is on the ground floor, which I know is not ideal. It's near the st kilda botanical gardens, but also near a fairly notorious prostitution street. That doesn't bother me personally, but could potentially be a deterrent for tenants down the line.


Anyway...
My intention is to buy a place I like in a good location and do some renovations when I can afford it. I'm not in a rush, I might stay a long time, or I might decide to rent it out.

I'm not sure if I asked any specific questions in there. I'm really just after some current opinions and advice on the area and my situation I guess.

Thanks everyone

 

[Aaron_C]

Pretty solid and popular area...what's the problem?

 

[DavidMc]

If you plan to use it as a PPOR and then convert it into an IP, make sure you don't pay off any principle on the loan.

Make sure you have an offset account use this instead as to not ruin the full deductibility of the loan.

When you move out years later, you can take all your money out of the offset and the original loan will be fully tax deductible. If you had paid it down, and then redrew that money back then that will be considered 'new lending' and it's purpose will have to be reassessed for tax.

 

[DavidMc]

Also make sure to get a preapproval - anything under 50sqm can be hard for lending.

 

[Aaron_C]

Also make sure to get a preapproval - anything under 50sqm can be hard for lending.

I'm sorry David but a pre-approval for this kind of scenario is useless for this very reason....since pre-approvals tick every box EXCEPT security...

Best thing to do is an upfront valuation without a pre-approval.

 

[Compleks]

Pretty solid and popular area...what's the problem?

Thank Aaron. No problem, was after some more seasoned opinions on the general area.

If you plan to use it as a PPOR and then convert it into an IP, make sure you don't pay off any principle on the loan.

Thanks David. That's what I intend on doing.
(Maybe you can help me with something. I own an investment property and the loan for that has an offset account. If you own multiple properties is there any point in having multiple offset accounts?)

Also make sure to get a preapproval - anything under 50sqm can be hard for lending.

Thanks, I have heard this size can be an issue. I was quoted an estimate of 40-50 square meters, not including the courtyard, of the property I am interested in. But I'm still waiting for the section 32 (I assume this will have exact measurements)

I'm sorry David but a pre-approval for this kind of scenario is useless for this very reason....since pre-approvals tick every box EXCEPT security...

Best thing to do is an upfront valuation without a pre-approval.

Thanks Aaron. You lost me a bit here though. Do you mean that I should have the proposed lender do a valuation of the property? Will they lend on a property above a certain value even if it is below 50 squares?

Thanks for the input, much appreciated.

 

[Jake Milne]

You could always try looking at suburbs like Elsternwick and Ripponlea?

 

[Aaron_C]

Thanks Aaron. You lost me a bit here though. Do you mean that I should have the proposed lender do a valuation of the property? Will they lend on a property above a certain value even if it is below 50 squares?

Thanks for the input, much appreciated.

No - you should check before you buy which lenders do lend on apartments below 50 sqm. No need for a valuation per se as that will be the case anyway.

 

[Compleks]

You could always try looking at suburbs like Elsternwick and Ripponlea?

Thanks Jake.
I have searched surrounding suburbs as well. I'm hoping I can find something in St Kilda, but will probably have to consider other options too.

No - you should check before you buy which lenders do lend on apartments below 50 sqm. No need for a valuation per se as that will be the case anyway.

Thanks for the advice Aaron.