Where to spend $390k in greater Melbourne

[Jom]

Hi all

I am in the unfortunate situation of going through the process of separation with my wife.

We are currently living in our house (PPOR) in Mt Eliza (Victoria), which we will need to sell this as neither of us can afford to buy the other out.

As a result I am looking to now purchase another PPOR, and have calculated that I would like to spend roughly $390k on a property which I intend to live in at first, and then turn into and investment to rent out down the track. My current thinking this that I might buy something in the Frankston area, but I am also considering options of apartments close to the city.

I have other property (2 IPs) in Frankston so know the area quite well so would be in a good position to pick up a good buy if I spotted one.

I am considering other options as well because I work in the city so would appreciate the benefits living closer to cut out the large commute I currently do every day.

I am thinking about areas like port melbourne and south yarra. I think for about the $400k mark i might be able to pick up a smallish one bedroom. My thinking is that I might enjoy living in either of these areas in the short/medium term. And I figure that these areas will always be easy to rent out, as they are very popular, especially amongst young singles and couples. By buying there it would also enable me to diversify my property portfolio to some extent and not have "all my eggs in the one basket".

I am after people's thoughts on the above plan, and particularly ideas about where $390k would be best spent from an investment point of view (I'm mainly after long term capital gains, though also strongly consider something with a higher yield but lesser CG prospects). I'd also consider buying something in the outer suburbs with subdivision or renovation potential... but any thoughts welcomed

I imagine that in the long term I will end up living in the outer suburbs again, and consider that the living closer to the city option is only temporary as if I do one day start a family I would prefer to do it away from town with more space etc.

Cheers
Jom

 

[mary&mat]

Hi Jom,

Could either of you buy out the other using a 'rent to own' setup?

RE the $390K, saw a nice 1br in Malver, tooronga rd, secure osp, was advertised 260-280 & think it went for 305 on the weekend...but as far as Sth Yarra or Port etc for that price, I'm not sure you'd get more than a dogbox there unfortunately.

Is Hawthorn & surrounds an option...you may get something ok there for that price?

Regards,
M&M

 

[Ms Jade]

Sorry to hear about your separation, Jom. It sucks, but I guess you have to make the most of a bad situation.

I still see upside for Frankston but like you say - you have exposure there already. I would be more likely to try & secure something in the inner city:
Sth Yarra
Toorak (sought after street)
Hawthorn (in a nice pocket & opportunity to value add).

For a renovator or potential dual-occ block (that i would consider at least a mid-term prospect) you could try around Boronia:
like this
or this

 

[Jom]

Thanks Mary&Matt and Ms Jade, these look like some good options for me. I'm just going to need to take it slow and not rush into anything. Obviously I will need to do my DD before taking the plunge once again.

I haven't had the val done on our place yet, so I guess I need to wait for at least that before I make any big decisions about where to next.

I appreciate the thoughts/suggestions though, and this helps in my "planning ahead".

Any other suggestions on specific places or general areas welcome!

 

[zed_kid]

In before Wunderbar comes into this thread, bags everyone out, contributes nothing and derails the thread...

To not derail the thread myself I’ll say +1 for SY. It’s positioned so well and you’ll have no worries renting it out when you convert it to IP. Pro tip: put it on the market as a fully furnished, all bills included, short term rental. You’ll either get corporate types lining up or backpackers, anyway they pay top dollar.

 

[Jom]

Noted, good tip Z-kid, thankyou!

 

[Vic Bitter]

i'd personsally buy a house in werribee with 390k and slug out the train ride to the city each day... not sure of its rental potential down the track as it is 30 kms from the CBD. let us know where you buy cheers

 

[Jom]

Hi Vicbitter, just wondering why it is that you suggest Werribee?

 

[Vic Bitter]

jom

still needing more research on my end and maybe a day trip to the town...
werribee looks like a well established area, supply of property won’t increase in the area and $390k should get you a decent size block...
things i still need to investigate are the area’s culture and lifestyle and whether it’s prone to floods...

i’ve also been interested in cranbourne on your side of town but will be staying well clear of brookland greens...

 

[zed_kid]

jom

still needing more research on my end and maybe a day trip to the town...
werribee looks like a well established area, supply of property won’t increase in the area and $390k should get you a decent size block...
things i still need to investigate are the area’s culture and lifestyle and whether it’s prone to floods...

i’ve also been interested in cranbourne on your side of town but will be staying well clear of brookland greens...

- the area is established
- supply of property will increase exponentially if the demand is there. (there’s a butt load of land there)
- 390k will get you a lot there (land and house wise)
- The culture is bogan / immigrant
- Didn’t flood this year and it was the wettest year on record? (maybe some minor flooding but nothing news worthy)

Disclaimer: I’ve been looking for a sub-divisible block with a 3/1/1 house on it in Werribee but the prices are running away from me (small-ish budget)

 

[Jom]

Zed kid, what sort of price range do you need to look at for the subdivideable block which you are looking for?

 

[jclegg]

Ringwood/Croyden perhaps

Hi Jom,

Sorry to hear about your situation. We have an IP in Ringwood (2BR unit $340k, rents at 300pw) and I believe the area has a lot of potential in terms of CG. Money is being spent on infrastructure, Eastland is expanding and with Eastlink it is easy to commute and the rail link is excellent (Lillydale+Belgrave). I am no expert but I think you should be able to get something for under 400K still. Good luck.

 

[zed_kid]

My budget was anything under 300k. The criteria were, 1. big block (600sqm+) 2. standard block for easy sub-div 3. a liveable 3/1/1 house. CF neutral was a bonus.
Most of the stuff I saw were irregular blocks, small frontage, poor locations (far from town centre / train station or located in a cal de sac)
350k opens up a lot of options, 390k even more so. I think the above can be achieved for 350k -/+

Another idea is to buy in Werribee South where it’s cheaper and less developed and wait for the Wyndham Harbour to be built and milk the CG, but this relies a lot on things I can’t control, like the Marina development actually being completed lol. Plus the horse might have bolted on this one already, I haven’t researched Werribee South much.

 

[boiselfish]

My budget was anything under 300k. The criteria were, 1. big block (600sqm+) 2. standard block for easy sub-div 3. a liveable 3/1/1 house. CF neutral was a bonus.
Most of the stuff I saw were irregular blocks, small frontage, poor locations (far from town centre / train station or located in a cal de sac)
350k opens up a lot of options, 390k even more so. I think the above can be achieved for 350k -/+

If you look hard enough you will find exactly what your looking for. They are there in Werribee, just very few. Mostly in the price range os 260 to 290k.

The council is very pro development around the Werribee CBD area and are very helpful and willing to get your plans to work.

 

[zed_kid]

It’s hard to get a really good, regular, large frontage block close to the Werribee CBD

 

[Riasta]

Agree with the sentiment on Ringwood. Such a hub in the outer East with good CG prospects. Good yield at the moment (for Melbourne) and still affordable. Look at Ringwood East too - much more leafy and "liveable".

 

[Paul Thewlis]

Ringwood

I'd agree with comments about Ringwood. Its 30 mins on the freeway to Frankston and the same to the city, Mt Dandenong and little more to the Yarra Valley. So surprisingly central for work and play. We've been doing a deal of research on the area because we are working with a developer who has a project about to launch in Ringwood. His recent projects have been in the luxury apartment market and he is moving into the affordable/mid range market but bring all his quality skills into the project. He's had a look at about 50-60 sites and choosen Ringwood so we're very exciting about both the project and the location.