Which city will you buy in -2007?

[The Y-man]

As a sydney-sider, I dont have the micro knowledge of suburbs (i.e. what parts of the suburbs are dodgy) but am looking at the following

What the.... You're a Sydneysider with no micro-knowledge, and thenyou want to buy out of town????

b) clayton south 2bed unit
close to monash uni

c) noble park 2bed unit
undergoing gentrification, cheap


What are your thoughts?

b) Better closer to Clayton Station. Near uni is not popular (not sure why - probably no shops, and gunmen)

c) Still not sure if it is the sort of place you leave a nice car parked in the street without it going missing. The gentrification has been a long time coming. From a transport point of view, first of the Zone 3 stations - though this is probably an advantage come the disapperance of Zone 3 next year

Time for a different thread maybe?

Cheers,

The Y-man

 

[Monopoly]

a) frankston 2bed unit
close to station, close to beach

Frankston - as in central? north? south? or heights? Any of these is IMO good value except for Frankston North, not that it won't be okay in the longer term, but it will take some time and is still undergoing gentrification. But hey, I see one of your choices is based on this criteria, and as it does fit into the "cheap" category as specified, I guess it would fit the bill for you.

b) clayton south 2bed unit
close to monash uni

Being close to major educational institutes such as universities, and especially leading ones such as Monash is always a worthwhile and lucrative investment.

c) noble park 2bed unit
undergoing gentrification, cheap

Nope, you can keep this one!! Has a long way to go before I'd put my money here, but that's just my opinion. In comparison, Frankston North is cheap and is also undergoing gentrification, but it stands a better chance of doing so much sooner because it's not surrounded by Springvale, Dandenong Nth and other unsavoury neighbours!!!

 

[alexlee]

(my analysis paralysis came from unrealistic expectations perhaps: hoping that if one could buy well it would be possible for one to do stuff like 100 properties in 2 years)

That's what I figured. Run the numbers: you can get rich just by buying 1 or 2 properties a year.

As a sydney-sider, I dont have the micro knowledge of suburbs (i.e. what parts of the suburbs are dodgy) but am looking at the following

Uh, in which case why do you think you have more intimate knowledge of suburbs in other cities? I would have thought the simplest way is: every Saturday or whatever choose a suburb, go have lunch there and drive / walk through it. Check out the cars on the street, people walking around, how they dress, etc. Try going on weekdays: are there a lot of adults who look like they don't have jobs?
Alex

 

[TheAnalyst]

Alexlee, I talked about Steve's book and mainly tried to advise you have an open mind on your own strategy. I am not saying I agree to buy in the region --- which I will never buy in the small town regardless how the +ve high is. But some of this talks are making a lot of sense on investing (forget the positive cash flow . I have long view that the +ve thing)

 

[lowb]

*actually a side reason is:
as travel is fun, i thought that being able to take tax-deductible trips to melbourne would be icing on the cake but am i mixing business with pleasure here?

*gentrification seems to be an important factor; would purchasing in a bad neighborhood -even WITHOUT gentrification- be a good investment in the long term?
if gentrification is really important, then an IP in noble park could be a gamble...

*personally i would rather live close to the uni than the cbd; in a way, would the proximity to uni be more important than proximity to cbd (or the beach)?
if proximity to the uni is really good, then clayton is a good bet!
frankston is nice because its close to the beach and also a hospital..

What are your thoughts?

 

[Monopoly]

but am i mixing business with pleasure here?

Yes, but it's not a crime you know!!

would purchasing in a bad neighborhood -even WITHOUT gentrification- be a good investment in the long term?

In the long term (possibly long, long long term) any investment has the potential to become a good one.

personally i would rather live close to the uni than the cbd; in a way, would the proximity to uni be more important than proximity to cbd (or the beach)?

It's "horses for courses" really. Some people would rather be as far removed from uni students as they could possibly get, others dread the thought of eye-sores such as the towering city skyscrapers positioned at every turn. And others still, prefer bushland to seashores.....it's all about personal preference. If you're trying to "please all the people all the time" FORGET IT mate, it ain't gonna happen!!! Do what makes YOU happy, and to quote a line from a well known movie (transposing the first word) "buy it, and they will come....."

frankston is nice because its close to the beach and also a hospital..

Congratulations, you've just described about 95% of the bayside suburbs in Melbourne!!! Most have a hospital (or at very least, a good sized medical centre) nearby, and being bayside, ALL of them are close to the beach!!!

What are your thoughts?

More importantly, what are YOUR thoughts??

Lowb, your analysis-paralysis must be making you dizzy (it's making ME dizzy); as you seem to be going around in circles!!!

 

[Ruby]

if proximity to the uni is really good, then clayton is a good bet!
frankston is nice because its close to the beach and also a hospital..

What are your thoughts?

But what about the uni in Frankston, and one of the largest hospitals in Melbourne at Clayton?

What people need to remember and especially people from Sydney is that Melbourne suburbs are VERY widespread. Buying a unit in Clayton South is nowhere near the uni, if you want close to the uni you’ll need Clayton North.

 

[Monopoly]

But what about the uni in Frankston, and one of the largest hospitals in Melbourne at Clayton?

What people need to remember and especially people from Sydney is that Melbourne suburbs are VERY widespread. Buying a unit in Clayton South is nowhere near the uni, if you want close to the uni you’ll need Clayton North.

Oops, my bad ....Sorry lowb, Ruby is quite correct. I misread your "Clayton South" focussing only on your reference to the area close to Monash and of course forgetting (as indicated) that Monash is indeed, at the north end of Clayton. In the South, you have one of the largest Melbourne Hospitals (Jesse Mac). Either way, North or South there are sound investment opportunities at either end be it, hospitals and/or universities. But I wouldn't invest soley because of either criteria on their own; there is much you should consider before laying down your $$$

Thanks for the correction Ruby! I'm gettin' careless in me ol' age; think I might need to look into reading glasses, that or easing up on the Christmas spirit!!!

 

[Ruby]

In the South, you have one of the largest Melbourne Hospitals (Jesse Mac).

Not correcting.....

But I'd class the hospital as Clayton central http://www.southernhealth.org.au/mmc.htm not that it matters, its still in Clayton.

 

[Monopoly]

Okay, I give up, I'm not having a good day. You are right Ruby, it is more central than South, I have NO IDEA where I got the notion it was further south!!! Thanks again Ruby....Lowb just ignore my comments, I may know a lot about nothing (at best) but when it comes to directions (sometimes) I know even less....I am a real shocker!!!

 

[lowb]

Thank you for your thoughts!

What are my thoughts? I think that property is really fascinating -and as such sometimes even tangents (that are not directly related to investing) interest me.

There is the age-old rivalry between sydney and melbourne -and the differences between the cities in city planning are affecting my decisions. The amenities seem to be wider spread out in melbourne (ruby, #67) and if you factor the better transport system in melbourne (tram network), it seems that demanded suburbs are more spreadout as compared to sydney (the east and the north).

i'll check my budget with prices in clayton north as well as clayton south; clayton south is further from monash uni but it looks to be within 15 mins of walking distance...

back to reality, i'll ring PMs, get a shortlist of possible IPs, fly over to melb, look for twists or bargains, talk to PMs and local people, observe some suburbs, have some nice coffee, get copy of contracts, haggle with sellers from sydney, and then finish it off.

for melbourne, apart from clayton south / frankston there are bound to be many nice suburbs that only the natives can spot! oh well, in sydney we had a very nice fireworks display on the harbor bridge

 

[Monopoly]

There is the age-old rivalry between sydney and melbourne -and the differences between the cities

Never understood this ridiculous pettiness. Melbourne vs Sydney (or vice versa)!!

I guess, at the end of the day Lowb, you will buy where you feel most comfortable. I think pricewise you will get more for your $$$ in Melbourne, but that's not to say Sydney has anything less to offer; just different.

Viva le difference!!!

 

[The Y-man]

back to reality, i'll ring PMs, get a shortlist of possible IPs, fly over to melb, look for twists or bargains, talk to PMs and local people, observe some suburbs, have some nice coffee, get copy of contracts, haggle with sellers from sydney, and then finish it off.

...but then your trip will not be tax deductible? Include a meeting with MIG, and there may be a chance

Cheers,

The Y-man

 

[Rixter]

...but then your trip will not be tax deductible? Include a meeting with MIG, and there may be a chance
/QUOTE]

MIG - a Russian fighter airplane?

 

[coopranos]

*actually a side reason is:
as travel is fun, i thought that being able to take tax-deductible trips to melbourne would be icing on the cake but am i mixing business with pleasure here?

*gentrification seems to be an important factor; would purchasing in a bad neighborhood -even WITHOUT gentrification- be a good investment in the long term?
if gentrification is really important, then an IP in noble park could be a gamble...

*personally i would rather live close to the uni than the cbd; in a way, would the proximity to uni be more important than proximity to cbd (or the beach)?
if proximity to the uni is really good, then clayton is a good bet!
frankston is nice because its close to the beach and also a hospital..

What are your thoughts?

LOWB:
I am nowhere near an expert, but my limited experience may be of some benefit to you, maybe not...
We found for our first investment property that the easiest thing for us to do was buy a house right around the corner from us. After the fact, I can justify it with things such as being in a cheaper area so would attract a large market should we decide to sell, easy to rent in the current market, ability to rezone in the future, etc etc. However the real reason we picked this one was because a) we knew the prices of the area intimately having just purchased our home there less than a year before, and b) we know the area very well having grown up in the vicinity.
At the end of the day, we got a good price, tenant in within 2 weeks on a 2 year lease, and it jumped by almost 50% since we got it in April. I had read property books for years, but when we finally made the move, I did very little of the due diligence they usually recommend in all the books. We knew the area and knew the prices.
In reality, even if the huge capital gain wasnt there, I would still be very happy with it.
The best advice I got from the books was "the best time to buy is as soon as you can", "buy close to or less than the median price for the area", and "dont over commit, buy something you can afford".
This is a plain vanilla way to go, you might not wind up on A Current Affair for buying 5,463 properties in 2 months going this way, but I can tell you it is a nice feeling to have the first one down.

Another bit of advice, or maybe more an opinion, is forget about tax benefits when buying a house (ie tax deductible trips, etc). Tax benefits are there as a bonus to assist you with the cashflow issues usually related to property, not for discounted holidays. First worrry about getting a property you are happy with, that you can afford, and that helps you meet your long term goals, then when you have purchased it worry about what tax savings you can get. In the medium to long term the benefits of a well chosen property will far outweigh any small tax dodges on 'business related travel'.
Hope this is of some small help...

 

[joannep]

THE RELUCTANT INVESTORS LAMENT

I hesitate to make a list
Of opportunities I have missed
Investments that were in my grip
I watch them through my finger’s slip
Prime properties I should have bought
Were lost because of over-thought
I thought of this – I thought of that
I could have sworn I smelled a rat
And while I thought things over twice
Another grabbed them at the price
It always seems I hesitate
Then make my mind up much too late
A very cautious person am I
And that is why I never buy
I chose to think and as I thought
They bought the house I should have bought!
The golden chances I had then
Are lost and will never ever come again
Today I cannot be enticed
For everything’s so overpriced
The deals of yesteryear are dead,
The market’s soft – and so’s my head!
At times a teardrop drowns my eye
I had the chance, but did not buy,
And now life’s saddest words I pen –
If only I’d decided then

Author Unknown



Some food for thought![/QUOTE]
what a great poem!! Absolutely cracked up when we read this poem. We'll send this to a few of our friends if that's ok Rixter. I'm so glad that we can't be accused of the above (although i admit I was initially!!).

 

[lowb]

thanks for all your help!

armed with a lot of reading and advice, im much more confident in property investing. in addition, the fear of 'missing a boom' is actually nil now.

in a way, there is always 'reactive property investing': suppose sydney booms and i've tied up all my savings in IPs in other states, if one can save enough for a small deposit within 1 year, one most probably has enough time to buy in the outer suburbs, or even NSW regional property to catch the boom.

fire at will!

 

[lowb]

Some books (from memory...) mention that it is best to buy where the price is most affordable; looking at the affordability study (link below), the median multiple was sorted.

With this view in mind, the most attractive city is canberra

capital city, median house price / median household income
Canberra 4.9
Darwin 5.6
Brisbane 6.1
Adelaide 6.5
Melbourne 6.6
Hobart 7.0
Perth 8.0
Sydney 8.5


Any thoughts?

Reference:
3rd Annual Demographia International Housing Affordability Survey
http://www.demographia.com/dhi-ix2005q3.pdf

 

[Monopoly]

Some books (from memory...) mention that it is best to buy where the price is most affordable.

Any thoughts?

Yeah, why???

As an investor I would prefer to buy where housing is least affordable, that way my potential tenants aren't going to do the (as marketing spiels put it) "wave goodbye to your landlord" on me!!!

As a homeowner however, tis a different ball game. But then, I'm sure that's no great mystery to most investors (I think).

 

[geoffw]

Canberra is showing some of the tightest rental vacancy rates in the country- 1.1%.