With 1.1 million, where should I buy my apartment?

[jackula]

Hi, I have recently begun looking at apartments for long term investment and to live in. I currently spend about 3 to 4 each day on the road to work (Cr William/Bourke St).

I bought my first house two years ago in Canberra, a 4 bedroom, so far I've paid off about 25% of that and my rental income far exceeds the interest I am paying. So this purchase will not be my first home and I'll be competing with all those first home owners.

I called my bank yesterday and they told me I can loan a maximum of 900k with my current salary, I am still in the process of getting the pre-approval.

An apartment with 2 bedrooms and 1 carport is a must. I would live in the smaller room and my tenants will help me pay off my loan. Being in walking distance is most important to me, second most important is the view and third for long term investment.

So my questions are, based on what I have available to me, what are my options? Should I wait to September when the first home owner's grant ends? Also I don't want to borrow 900k, is 400k + 200k (cash) + flexibility good enough for me?

 

[Propertunity]

So my questions are, based on what I have available to me, what are my options?

I'll let the MEL based ppl answer this.

Should I wait to September when the first home owner's grant ends?

The FHOG is not ending in September. The FHOG goes on with no end in sight. The FHOBoost is halved from the end of Sept to end of Dec then goes away.

Also I don't want to borrow 900k, is 400k + 200k (cash) + flexibility good enough for me?

At $600K there are still certainly FHBs around but not in sufficient quantity to cause you too much concern I wouldn't think. At an auction in SYD (close to the CBD) last week-end most of the eager FHB's were noticibly shaken when the bidding commenced at $550K, only one FHB remained at $590K and even he dropped out at $603K. It was picked up by a middle-aged couple who'd done this before.

 

[The Y-man]

Should I wait to September when the first home owner's grant ends?

You won't be competing with first home buyers in the price range you are looking at.

You will however be in a position to take advantage of any forced sales. I would especially keep an eye on projects that are just completing, and the buyers are unable to settle due to financial circumstances - so you are essentially there to rescue them by flipping the property to you (at a reduced price of course).

Cheers,

The Y-man

 

[HandyAndy888]

What everyone else said....

 

[jackula]

At $600K there are still certainly FHBs around but not in sufficient quantity to cause you too much concern I wouldn't think.

That's good to know, but you're right, when I looked for my first home I was only looking in the 300 to 400 range Rudd's FHB grant is silly, all it does is push up the prices, but I take it the properties in the 600k is unaffected or only slightly affected?

You will however be in a position to take advantage of any forced sales. I would especially keep an eye on projects that are just completing, and the buyers are unable to settle due to financial circumstances - so you are essentially there to rescue them by flipping the property to you (at a reduced price of course).

I find properties on realestate.com.au, how would you know if a listed property fits that criteria? That is, other than rocking up and asking the question directly?

Another problem with buying apartments which has just been completed is most of them are being built in less popular areas. Take the Docklands for example, all the new apartments are being built in-land, I went to one yesterday and from the Balcony all you could see were other apartments across the road.

 

[The Y-man]

I went to one yesterday and from the Balcony all you could see were other apartments across the road.

For an easy walk to William/Bourke, there may not be much of a view regardless...

As for finding them - no simple, easy way - just looking for "unusually priced" ads on re.com, or any of the usual "must sell" signs - but this assumes you need to know the OTP price on the project.

Cheers,

The Y-man

 

[Rolf Latham]

Hiya

Id borrow the max I could, on an IO loan with 100 % offset, and stick the excess into a 100 % offset account

ta
rolf

 

[keneth]

elwood
armadale
prahran
hawthorn
south yarra

you have options there all places where people like to rent.

 

[Frankstonite]

If you loan the full amount there would be only one place on my radar.... East Melbourne.

 

[The Y-man]

elwood
armadale
prahran
hawthorn
south yarra

you have options there all places where people like to rent.

None are walking distance to his work though.... (top priority according to the list)...

The Y-man

 

[Ol School Skata]

Jackula,

Don't take offence at this...but the first thing you should do is get educated on how to invest. By coming onto an investment forum and asking where you should spend your money tells everyone you don't know what to do with it.

My response is don't invest in anything other than educating yourself on how to assess investments.

OSS

 

[Leikela]

Isn't by asking for advice on this forum, exactly what he's doing? Educating himself. Ol School Skata your comments are completely unfair and unnecessary.

Jackula, have you considered Port Melbourne? Lovely spot there, especially Beacon Cove. You'd have a minute's walk to the tram and then 15 minutes tram ride into the city to your work. On the beach and minutes from the city, I don't think you can go wrong there.

 

[landlubber]

Suggestions.

East Melbourne - conservative but blue, blue chip.
Port Melbourne - water plus light rail to CBD.
Docklands or CBD - hi-rise views. Close to work.
Possibly consider getting on the email list from City Residential.
LL

 

[MissAlison]

No FHOG for buyers spending over $600k in Victoria as of July 1st.

If that helps?

 

[poordeveloper]

My quick read of:

http://www.sro.vic.gov.au/sro/SROnav.nsf/Home+Page/SRO~Home+Page?open

led me to believe that the $600K limit only applied to the FHO bonus, not the FHOG. Is this incorrect?

 

[jackula]

Thanks for all the responses, based on the advices given I made an offer of 720k for a three bedroom apartment on south bank, the owner is considering it and hasn't been knocked back so far, do you think this is a fair offer for an apartment in that area?

 

[RightValue]

Thanks for all the responses, based on the advices given I made an offer of 720k for a three bedroom apartment on south bank, the owner is considering it and hasn't been knocked back so far, do you think this is a fair offer for an apartment in that area?

For a 200sqm apartment with 75sqm terrace, and 3 basement carparks and a storage cage .. and a 270 degree view from the 27th floor with 3 marlbe bathrooms and state of the art kitchen it sounds good to me*.

Why are you asking for our opinions when the only info you give is that it is south of the Yarra and has 3 bedrooms??

Do you not think that size and carparks and any terrace, view or level amd quality of fitout are important in determining value??

Based on what you have seen similar apartments sell for (ignore asking prices) do you think that you have offers a fair amount???

RightValue

*I have no idea about Southbank apartment values... I last valued one in 2004

 

[BayView]

I find properties on realestate.com.au, how would you know if a listed property fits that criteria? That is, other than rocking up and asking the question directly?

Another problem with buying apartments which has just been completed is most of them are being built in less popular areas. Take the Docklands for example, all the new apartments are being built in-land, I went to one yesterday and from the Balcony all you could see were other apartments across the road.

That's all part of your DD and selection criteria.

You've done part of it - selected the area, established your budget, now trawl the area until you find the best apartments in the best areas that will fit the budget.

On your salary, you could pay a BA to do it for you if you don't have time.

 

[jackula]

For a 200sqm apartment with 75sqm terrace, and 3 basement carparks and a storage cage .. and a 270 degree view from the 27th floor with 3 marlbe bathrooms and state of the art kitchen it sounds good to me*.

Why are you asking for our opinions when the only info you give is that it is south of the Yarra and has 3 bedrooms??

The bedroom was the top level - 36th floor - of City Tower on the south bank, it was completed in 2004 by Central Equity. It has 3 large bedrooms, 2 bathrooms and 2 carspace. The total floor area is 135 sqm not including the balcony which looks around 5 sqm. The apartment is covered with marble flooring and benches and uses Miele appliances. Lots of windows and lots of sunlight.

Only problem is that it has no view. I have withdrawn my offer because the view gives it a poor resale value as compared to the cheaper apartments at docklands with a good view?

 

[investwest]

thought that was a bit unfair too!

Jackula,

Don't take offence at this...but the first thing you should do is get educated on how to invest. By coming onto an investment forum and asking where you should spend your money tells everyone you don't know what to do with it.

My response is don't invest in anything other than educating yourself on how to assess investments.

OSS

This forum is a form of education, and no question is a stupid one. If I had that much to invest in one property, I would be looking at East Melbourne too. I think it's undervalued at the moment, lucky you.