Would you consider? (st.kilda)

[Compleks]

Buying a 37m2 1br apartment, car park on title, in the heart of St. Kilda?

Opposite botanical gardens, minutes from Ackland st and the beach.
Block of 14 apartments, probably built in the 70s (guessing), strata titled.

Can purchase for close to $300k. Spend $5-10k on renovations and rent out for $300p/w. More if furnished.


The yield might be reasonable, but I don't think/know if there is any decent potential for growth in this sort of property.

 

[jackbak]

Buying a 37m2 1br apartment, car park on title, in the heart of St. Kilda?

Opposite botanical gardens, minutes from Ackland st and the beach.
Block of 14 apartments, probably built in the 70s (guessing), strata titled.

Can purchase for close to $300k. Spend $5-10k on renovations and rent out for $300p/w. More if furnished.


The yield might be reasonable, but I don't think/know if there is any decent potential for growth in this sort of property.

The general consensus for these properties is you need at least 50m2 - easier to finance and resell.

 

[Mr. Fabulous]

Hi compleks, is it a studio? I moved back to St Kilda about a year ago after living in Brislantis for 8 years. When I was looking for a place to rent, 1 bedrooms (actual 1 bedrooms, with a separate bedroom) were renting for only 40 or 50 bucks a week more than a studio. The place I got is roughly twice the size of a studio and only around 40 bucks a week more.

It doesn't have a car space, but since I don't own a car, it's not a problem. Besides, you can get parking permits from the council for 80 bucks a year. Also, a few of the places I looked at (1 bedders, not studios) did have car spaces for the same rent (maybe 10 or 20 more a week than without it). From personal observation, plenty of people that live here own cars, but are happy to either walk to get around or use the trams (which run virtually non-stop from 6am - 1am with a 20 minute wait at the most). I'm so spoiled by the consistency that if I find myself waiting more than 10 minutes, I start getting upset, lol.

Personally, I would be inclined to buy a proper 1 bedroom place over a studio.

 

[The Y-man]

6/84 Blessington and 26/9 Southey look bigger than 36sqm....

The Y-man

 

[Peter_Tersteeg]

Really nice area, I lived in Dickens St many years ago.

The apartment size is difficult to finance and this is one of the reasons you'd probably only see modest capital growth. You could say that it's a somewhat self fulfilling prophesy. Banks don't want to finance them because they don't sell very well. People don't want to buy them because they're difficult to get finance for.

I also that people don't want to buy them because they're no good for anyone but a single person. The market for these properties is extremely limited. Even a slightly larger 1br apartment is going to have much more appeal to both future purchasers and tenants.

 

[Compleks]

The general consensus for these properties is you need at least 50m2 - easier to finance and resell.

Cheers jackbak.

Hi compleks, is it a studio?

It is indeed a 'proper' 1br. Just a very small one

6/84 Blessington and 26/9 Southey look bigger than 36sqm....

The Y-man

Those photos are so deceptive. 6/84 blessington st is the one in question. Perhaps he said 38sqm? It was small though. Will have a look at southey st, I think I skipped it because it had no car park from memory. Thanks.

Really nice area, I lived in Dickens St many years ago?.

Thanks PT. Hope you had a good break mate

I'm just looking at a few alternatives now. Been about 5 months looking at places I might actually like to live in, but haven't had any real luck.

Was thinking about living/renovating a place for 6 months, then renting it out. But not sure the CGT savings are really worth the hassle. Plus I'm not sure I would sell within 6 years anyway.

So now I'm thinking I might just bite the bullet and find somewhere to rent personally, and then look at another property strictly as an investment. Which means I won't necessarily be limited to St. Kilda.

But again, this is just my latest chain of thought. Just weighing up my options at this stage.

Happy new year to all.

 

[Aaron_C]

It's simple numbers, really. If you are buying something below 50sqm then your target market has to be those with a 20% deposit. Given St Kilda is popular with first home buyers who have little cash, this just doesn't add up to your target demographic. Hence price appreciation is likely to be ordinary even though the area is popular.

 

[Jake Milne]

It's simple numbers, really. If you are buying something below 50sqm then your target market has to be those with a 20% deposit. Given St Kilda is popular with first home buyers who have little cash, this just doesn't add up to your target demographic. Hence price appreciation is likely to be ordinary even though the area is popular.

+1 to this and PT's....

 

[Compleks]

It's simple numbers, really.

+1 to this and PT's....

Thankyou gents. Very informative as usual.

 

[S.T]

2/84 sold in Aug 2013 for $325k

Some sales in that block from Southey over the last 18 months

$275k
$280k
$295k
$310k

Just to give you some idea on prices/recent growth/prospects

 

[The Y-man]

Those photos are so deceptive. 6/84 blessington st is the one in question. Perhaps he said 38sqm? It was small though. Will have a look at southey st, I think I skipped it because it had no car park from memory. Thanks.

Ok, just did an estimate from the floor plan - I guessed at 43 sqm, so 38 might be right.

It looks "ready to rent" - why spend money on it? What would you change?

The Y-man

 

[Jake Milne]

Compleks let me know if you want any info on Blessington... Aviv and I know each other well...

Confirmation: https://fbcdn-sphotos-h-a.akamaihd.net/hphotos-ak-ash3/t1/603055_660706917296689_686333411_n.jpg

 

[Compleks]

2/84 sold in Aug 2013 for $325k

Thanks Sim. I actually bid on that one, so I have been keeping an eye on the area for a while now.

Ok, just did an estimate from the floor plan - I guessed at 43 sqm, so 38 might be right.

It looks "ready to rent" - why spend money on it? What would you change?

The Y-man

Good eye!
It's a pretty old building obviously. It has had some minor work, but it's all pretty dated. The kitchen and bathroom are pretty stale and the floor is fairly warped.
This is more of a hypothetical/learning activity though.
Apparently renting it furnished can bring a significant rise in rental. But whether it's worth the cost I wouldn't know. Same with any renovations, as it could be rented as is for probably $280p/w at a guess.

Compleks let me know if you want any info on Blessington... Aviv and I know each other well...

Confirmation: https://fbcdn-sphotos-h-a.akamaihd.net/hphotos-ak-ash3/t1/603055_660706917296689_686333411_n.jpg

Looking sharp guys
Thanks for the offer Jake, you're a good man. Aviv also struck me as quite genuine, which I haven't noticed in a great deal of agents.

Cheers.

 

[The Y-man]

... the floor is fairly warped.

Uh.... righto.... is that just floating boards or the real deal? I thought units of this vintage (mid-late 60's at a guess) had concrete floors?

The Y-man

 

[JDP1]

Buying a 37m2 1br apartment, car park on title, in the heart of St. Kilda?

Opposite botanical gardens, minutes from Ackland st and the beach.
Block of 14 apartments, probably built in the 70s (guessing), strata titled.

Can purchase for close to $300k. Spend $5-10k on renovations and rent out for $300p/w. More if furnished.


The yield might be reasonable, but I don't think/know if there is any decent potential for growth in this sort of property.

Quite simply, there is no way a tiny 37m2 will have any decent CG [ I actually question if any non trivial CG can be had in 5 years].
Since you are - rightly in my opinion- chasing CG, then I would suggest buying interstate [ whilst renting in Melbourne if you wish]. 300k will get you much higher potential for CG properties interstate [ e.g. Brisbane or Adelaide suburban units] than that st Kilda unit.

 

[pieman]

I own a couple in acland st and one thing is, they rent in 3 minutes. My old man owns a bed sit <40sqm with cp that he paid 68k for in the late 90's. Not bad cg and not bad yield on his original investment of about 20% gross, and everyone said it wouldn't grow too

The right block will grow in cg. In the guts of stkilda you pay 450k off the plan for sub 50'ssqm flats. They won't go up but older blocks with no lifts will.
Pity about the stoke house ��

 

[Compleks]

Uh.... righto.... is that just floating boards or the real deal? I thought units of this vintage (mid-late 60's at a guess) had concrete floors?

The Y-man

Potentially just the boards.
I had a proper building inspection conducted on the ground floor apartment back in august 2012 and it did NOT have concrete floors as I thought it might. But maybe the level one floor/roof is concrete, I don't actually know.
But, this isn't the place for me anyway.

I would suggest buying interstate [ whilst renting in Melbourne if you wish]. 300k will get you much higher potential for CG properties interstate [ e.g. Brisbane or Adelaide suburban units] than that st Kilda unit.

I'm definitely considering my options at this stage. I'm leaning towards renting a place in St kilda, then looking at my alternatives for buying an IP elsewhere.

The right block will grow in cg. In the guts of stkilda you pay 450k off the plan for sub 50'ssqm flats. They won't go up but older blocks with no lifts will.
Pity about the stoke house ��

It's a great location and people will pay to rent there. Might not be the best tenants all the time, and probably a large turnaround, but vacancy I assume would be pretty low on any decent apartment.
I was only looking at the older/smaller blocks too. I will keep an eye out, but looks like a decent investment will be out of my price range.

Thanks everyone.