Hi Guys, I was just wondering what your thoughts would be on buying two properties in Melbourne at this point in the cycle. I only have one IP so far (Brisbane) and I'm going with Melbourne due to its strong population growth and jobs. To diversify, I'm thinking of going one in West and one in North, both detached houses on >500 sqm blocks of land: 1. IP1 in West: Albanvale, Tarneit, Truganina, Hoppers Crossing, Werribee; budget 450k; rental yield 4-4.2%; buying around median for the suburb; 2. IP2 in North: St Albans, Jacana, Dallas, Epping, Lalor, Deer Park, Thomastown; budget 550k; rental yield 4%; buying around median for the suburb. The suburbs above are just some quick ideas and need to be further refined. IP1 will be acquired by the end of April, and IP2 by the end of June. Buffer in offset by then will be 60k. All loans at 88% LVR. Would you consider this to be a risky move or a fairly safe strategy? Thanks a lot!
I've be already said this to you in the past, but would love to hear what others say, so I mention it again. If you're gonna spend 450k in Werribee/hoppers crossing/tarneit etc, it better be a block, is it over 600square? Can you build another place on it? Can you add value in anyway at 450k? Spending that much on a single home on a little block does not make sense. As you can buy on a small block closer to cbd in much better areas. If you go small block then buy in the best location you can afford, if you buy with a big block you leave options for the future to develop it, or pass it onto the next person. I would use your budget and buy a smaller block or townhouse in the best location you can afford if you you don't like the option above, regarding buying a bigger block. Your budget will let you buy into for example, Avondale heights, airport west, glenroy, Hadfield, and some other areas like these that people actually want to live in. Won't be a big block, but it's a better area to live in than Werribee/hoppers/tarneit. I never liked St. Albans but others like it and it's moved in price. Jacana is great if you get a big block, otherwise if it's only big enough for one house, move on to another better area. @albanga this is on your radar. Can you please help guide realist a little on St. Albans etc.
Hey mate, thanks for your comments, always great to hear your thoughts. I will definitely add the suburbs you mentioned onto my list. All the areas I mentioned are only a guide for me at the moment. I yet need to research them further and refine the target areas. I have listed more affordable suburbs as they are what most of the FHB can afford and also they typically have higher rental yield. With regards to the budget, I apologize because I wasn't clear. I will be buying around the median in whatever suburbs I end up buying. The budget values I indicated are absolute maximum figures.
All good, will be good to hear thoughts from others. I still think you should buy one in Melb, and make it a good one. No need to go straight to number 3 yet, chillax a little
Still like both those suburbs but by the time I first mentioned them and now has seen over a 100k increase so less value to be made. Long term StAlbans IMO will outperform everywhere being discussed in this thread though. Just look at the Melbourne by 2050 plan and see how integral these western hubs are. Also StAlbans already has so many solid fundamentals in place already. It's actually surprising it's taken this long to grow in price the way it is. Obviously stigma held up back for a long while.
