where to buy ip in melbourne for 500 k or less

Hi my name is daniel
And i am looking to buy my first investment i work in the mines in wa
but from melbourne originaly been looking at the western suburbs because of affordabillity but dont care were just want the best investment and dont want to spend to much on my first have about 80 grand in the bank doesn't take me long to save would like some advise please i have talked to a lot of advisers but they seemed to want me to buy there stock any help would be great
 
Hi Jacko,

Welcome.

What makes a "best investment" for you?


It depends on person to person, so bit hard to give info.

The Y-man
 
best investment to me would be the capital growth but one thing that is a issue well a bit of a worry is that at the moment yeah I'm on 150k a year but in 4 or 5 years when iget back to Melbourne I'm not going to be on that money so I'm worried about if say i have 4 properties or how many it is will i be able to afford it just unsure on the strategy i should use because I'm keen to get started
 
Hi my name is daniel
And i am looking to buy my first investment i work in the mines in wa
but from melbourne originaly been looking at the western suburbs because of affordabillity but dont care were just want the best investment and dont want to spend to much on my first have about 80 grand in the bank doesn't take me long to save would like some advise please i have talked to a lot of advisers but they seemed to want me to buy there stock any help would be great

Oh well if it's easy for you to save (ie quick to save), save up a bit more and buy some really good stuff. Maybe try to hit 150k in 6 months. Should have a lot more options.
 
best investment to me would be the capital growth but one thing that is a issue well a bit of a worry is that at the moment yeah I'm on 150k a year but in 4 or 5 years when iget back to Melbourne I'm not going to be on that money so I'm worried about if say i have 4 properties or how many it is will i be able to afford it just unsure on the strategy i should use because I'm keen to get started

Hi Jacko18,

If you like capital growth & have a buy & hold strategy (like we do), I would strongly suggest buy the best blue chip/s properties you can afford.

In 4 or 5 yrs when you get back to Melb & your income drops a bit, you should have had enough capital growth that you can set up LOC's (lines of credit) against any properties you have. Use these LOC's to pay for all IP expenses including loan repayments. You therefore shouldn't have to worry about any problems funding these properties as you will be using the banks' money to pay for them & (tax)deducting all the costs.

Does that sound like a system that could work for you that you would also be comfortable with?

PS If you're 18 (as in jacko18), good on you for starting our so early in property...you'll be able to retire by the time you're 35!!! So jealous, well done :)
 
best investment to me would be the capital growth but one thing that is a issue well a bit of a worry is that at the moment yeah I'm on 150k a year but in 4 or 5 years when iget back to Melbourne I'm not going to be on that money so I'm worried about if say i have 4 properties or how many it is will i be able to afford it just unsure on the strategy i should use because I'm keen to get started

One option may be to keep it conservative so you can put any spare cash into an offset and keep the propoerty(s) overall neutral.

For CG, it is most likely going to go the path of a house on a decent block of land.

How about your tenants risk profile - do you mind dealing with potentially "interesting" tenants? (i.e. may need to rebuild your propoerty now and again)

The Y-man
 
Hi Jacko18,

If you like capital growth & have a buy & hold strategy (like we do), I would strongly suggest buy the best blue chip/s properties you can afford.

In 4 or 5 yrs when you get back to Melb & your income drops a bit, you should have had enough capital growth that you can set up LOC's (lines of credit) against any properties you have. Use these LOC's to pay for all IP expenses including loan repayments. You therefore shouldn't have to worry about any problems funding these properties as you will be using the banks' money to pay for them & (tax)deducting all the costs.

Does that sound like a system that could work for you that you would also be comfortable with?

PS If you're 18 (as in jacko18), good on you for starting our so early in property...you'll be able to retire by the time you're 35!!! So jealous, well done :)


Haha that's aggressive... using debt to pay interest repayments. If you're not paying it off/down there'll come a point where you've drawn all your LOCs and your interest is astronomical lol
 
Yeah, it's a tad aggressive, but we feel that buying blue chip high capital growth properties is the way forward for us.
Eg debt $800K, for around $1M properties
Fast forward 3-5 yrs & these same properties will have appreciated enough that the $800K debt won't seem so daunting and our portfolio will be worth at least $1.5 - $2M.
Personally, I think it's smart to use debt to pay debt or OPM to pay debt. i know not everyone feels comfortable with that, but we can always up the LOC when our properties are revalued. (The interest is deductable so we're not too worried there.)
I know a lot on here are all about cash flow properties. That's great. But please don't pooh-pooh those of us who prefer capital growth :)
 
thanks for the advise people im just not sure if i want to spend 800 thousand on my first ip even though i now how much better it is living closer to the city how did you guys get advise on what to do when you first started or did you just go for it i think when I'm finished in the mines i would get as grand clear a week i only want to be putting 4 or 5 hundred in to that a week its a bit of a worry what suburbs where you can buy a house for 500 or under do you think will get good capital growth just worried on picking something that doesn't do much I'm in it for the long haul just want something that historically doubles in 10 years or am i just better buying one proven inner suburbs blue chip property and waiting to see growth or buying 2 properrties in outer sub urbs confused sorry jacko
 
Jacko,

You don't have to spend $800K in one hit. Have you thought about $400-$450K for a 1br within 10-12km of a major city?

NO :eek:, don't just 'go for it', do some research ie talk to people who invest in property, read Australian Property Investor and Your Investment Property magazines, search the internet in areas you like & see what prices & rents are....then you can do some figures (income v expenses) & see if it's a good return for your money.

Units are getting similar if not the same capital growth as houses in the blue chips. So you don't have to jump in & spend big on one house. You may decide to purchase a couple of apartments/units/flats in different suburbs/states to balance each other...when one state is not doing so well, the other state will pick up the slack (hopefully).....endless combinations....but if you don't know enough about property, you can't take advantage of opportunities when they arise.

Historically, outer suburbs not as good as inner...you even say this yourself. It sounds as though you know the basics of capital growth, buying & holding property v flipping etc but you also still sound confused. No-one is going to tell you 'the correct answer yes' or 'no' to purchasing a property. Ultimately it's up to you, it's a huge committment & you really need to be comfortable that you've made the right purchase for you.

Michael Yardney appears to promote capital growth as his strategy, maybe look over one of his books & see if it sounds like what you're after.

Good luck :)


thanks for the advise people im just not sure if i want to spend 800 thousand on my first ip even though i now how much better it is living closer to the city how did you guys get advise on what to do when you first started or did you just go for it i think when I'm finished in the mines i would get as grand clear a week i only want to be putting 4 or 5 hundred in to that a week its a bit of a worry what suburbs where you can buy a house for 500 or under do you think will get good capital growth just worried on picking something that doesn't do much I'm in it for the long haul just want something that historically doubles in 10 years or am i just better buying one proven inner suburbs blue chip property and waiting to see growth or buying 2 properrties in outer sub urbs confused sorry jacko
 
Jacko,

You don't have to spend $800K in one hit. Have you thought about $400-$450K for a 1br within 10-12km of a major city?

NO :eek:, don't just 'go for it', do some research ie talk to people who invest in property, read Australian Property Investor and Your Investment Property magazines, search the internet in areas you like & see what prices & rents are....then you can do some figures (income v expenses) & see if it's a good return for your money.

Units are getting similar if not the same capital growth as houses in the blue chips. So you don't have to jump in & spend big on one house. You may decide to purchase a couple of apartments/units/flats in different suburbs/states to balance each other...when one state is not doing so well, the other state will pick up the slack (hopefully).....endless combinations....but if you don't know enough about property, you can't take advantage of opportunities when they arise.

Historically, outer suburbs not as good as inner...you even say this yourself. It sounds as though you know the basics of capital growth, buying & holding property v flipping etc but you also still sound confused. No-one is going to tell you 'the correct answer yes' or 'no' to purchasing a property. Ultimately it's up to you, it's a huge committment & you really need to be comfortable that you've made the right purchase for you.

Michael Yardney appears to promote capital growth as his strategy, maybe look over one of his books & see if it sounds like what you're after.

Good luck :)



thanks Mary and mat do you think i need to save anymore for a deposit i do read a fair bit of your investment magazine and api i think i have had a information overload now I'm confused what to do have talked to a lot of investment advisers they have tried to sell me what they think and what they are selling not independent advise on anything and now i have lost confidence and i am confused
 
One option may be to keep it conservative so you can put any spare cash into an offset and keep the propoerty(s) overall neutral.

For CG, it is most likely going to go the path of a house on a decent block of land.

How about your tenants risk profile - do you mind dealing with potentially "interesting" tenants? (i.e. may need to rebuild your propoerty now and again)

The Y-man

yeah y-man i wouldnt want risky tenants were you say cg a house and big block are you talking inner suburbs or outer suburbs
 
I think your deposit's fine...it's my theory not to pour any more of our money into an IP than we have to...keep it for shares, or other opportunites perhaps?

Yeah, I totally get the overloaded & confused thing! Oh...so that's what you meant by just go for it!?!? Makes more sense in that context. Then in that case, if you've decided on a capital gains strategy, stick with it for now & just look at properties in the blue chips that fit your criteria eg 1br, 2br.

Follow some properties you would like to buy on the internet & see what they go for (in case you need to bid), maybe take a look at some Section 32's just to get familiar with the paperwork involved. All you need to do is just one step at a time & before you know it you'll be the proud owner of a fabulous property!

Does that help?:)

thanks Mary and mat do you think i need to save anymore for a deposit i do read a fair bit of your investment magazine and api i think i have had a information overload now I'm confused what to do have talked to a lot of investment advisers they have tried to sell me what they think and what they are selling not independent advise on anything and now i have lost confidence and i am confused
 
I think your deposit's fine...it's my theory not to pour any more of our money into an IP than we have to...keep it for shares, or other opportunites perhaps?

Yeah, I totally get the overloaded & confused thing! Oh...so that's what you meant by just go for it!?!? Makes more sense in that context. Then in that case, if you've decided on a capital gains strategy, stick with it for now & just look at properties in the blue chips that fit your criteria eg 1br, 2br.

Follow some properties you would like to buy on the internet & see what they go for (in case you need to bid), maybe take a look at some Section 32's just to get familiar with the paperwork involved. All you need to do is just one step at a time & before you know it you'll be the proud owner of a fabulous property!

Does that help?:)



yes thanks mary mat only thing is it is hard for me i work 4 weeks on 1 week of work way out in bush and then back in civilisation for a week
 
yeah y-man i wouldnt want risky tenants were you say cg a house and big block are you talking inner suburbs or outer suburbs

Outer for that sort of price.

On the other hand, here are some BIG BIG things you need to be aware of as I write:

1. The furthest out I have ever bought an IP is Clayton Sth. So I have no "experience in owning an "outer burb's" IP

2. Almost ALL of my IP's were (and are) apartments in the inner city.

You can get started for an older (60's) 1BR in Prahran for mid-$300's (I think).

As for CG, I bought my 1BR in Prahran for $160k in 2001 to give you some idea. My Fairfleld 1BR was an even better buy at $140k in tthat same year.

Food for thought?

The Y-man
 
Outer for that sort of price.

On the other hand, here are some BIG BIG things you need to be aware of as I write:

1. The furthest out I have ever bought an IP is Clayton Sth. So I have no "experience in owning an "outer burb's" IP

2. Almost ALL of my IP's were (and are) apartments in the inner city.

You can get started for an older (60's) 1BR in Prahran for mid-$300's (I think).

As for CG, I bought my 1BR in Prahran for $160k in 2001 to give you some idea. My Fairfleld 1BR was an even better buy at $140k in tthat same year.

Food for thought?

The Y-man



thanks y-man yeah it has made me think that it will nevder not have xsomebody to rent there its in neer the city its only going to go up in capital growth and probably a lot more then outer suburbs were you can still build what do you think of northcote and preston aswell
 
thanks y-man yeah it has made me think that it will nevder not have xsomebody to rent there its in neer the city its only going to go up in capital growth and probably a lot more then outer suburbs were you can still build what do you think of northcote and preston aswell

I used to have a 1BR in Fairfield, and a 2BR in Thornbury. Agree very little trouble renting out, and had decent CG.

The Y-man
 
I used to have a 1BR in Fairfield, and a 2BR in Thornbury. Agree very little trouble renting out, and had decent CG.

The Y-man

cheers y-man i think coburg lookes good and brunswick good price for me to get into the market and if the same looking properties like the 2 beedroom houses and townhouses go up like the suburbs a bit closer in to the city eg like east melbourne richmond and a lot of others then you would make a lot of capital growth cheers mate
 
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