VIC 340K budget. Invest and first home buy. Melton or suggestion for location?

Hey guys,
I am very new to the property scene. So please bear with me

I have a pre approved loan. Budget is max of $340K. Starting out in the investment. This is also my first home buy. I will still be renting in Reservoir for kids school, cheap rent, amenities nearby and closer to city.

Because this is my first investment, i want to start with smaller budget that i can afford. There are plenty of properties in Melton for 300k+ mark. I see good opportunities there because of Western Freeway and growth in surrounding suburbs. However, there are lot of stigma and negative comments around this area. I am planning to keep the property for a year or two. Targeting Melton area, Melton South most likely.

Could someone please suggest if this is a good move? Any other areas or suggestion?

Thanks in advance.

 

Why only a year or two?

Problems with "a year or two"
- cost of buying and selling are high
- market might not move in this time and you end up with an overall loss after costs of buying and selling. might even drop and you make a bigger loss.

Main reason for wanting to buy and sell so quickly is if you renovate to get a profit from that.

What are you planning on doing after a year or two?

 

Absolutely what Andrew has said. Why only the 2 years?

Melton has an abundance of vacant land surrounding it - going to take a while to fill out, and create a supply shortage

 

I think Sunbury may be a better option in terms of demographics and being more established. I would look close to the train station/shops - this is connected to the Sydenham line (more frequent trains than Melton regional trains) and may see a ripple effect from the CG in nearby suburbs. I'd buy an property that needs a bit of work and add value (nothing huge - new flooring, painting, update bathroom, etc) although you will probably need to spend closer to ~400k for the house. I haven't been in the area for a while so others may be able to provide further feedback.

 

I am still dont have all the know how. My aim is to create a positively geared portfolio. If 2 year or more is a good duration than be it.

Saving up my 100k was a hard bit, so hearing your experiences would probably save me from wrong move.

 

I am no expert, but basically if your plan is not to renovate it to sell for a quick profit, property investment is a long term plan (generally 10+ years) because for over half the time that you own it, it will be not rising much (or at all, or even making a loss sometimes), and the rest of the time generally either rising a little or a lot, but you don't get to choose when it will be rising, which is the reason why long term buy and hold is the most popular strategy because it will let you get through the flat or down period and get a chance for a boom to get your profits up.

Generally you really need to know what you are doing and understand the risks if you are planning to "need" to sell and take the money at a certain time because it is not up to you whether the previous 3 or 5 or 8 years were profitable, or (temporarily) flat or down, and you do not want to sell when it is down because you have then defeated the whole purpose of the investment in the first place.

Just some things to think about.
Keep reading this forum - there is amazing advice by people who are a world ahead of me in understanding this.


By the way, congratulations on saving up 100k! Really awesome!
Also, aiming for a positively geared portfolio is a great goal.

 

Rather different area, but for a budget of $340K, and for a hold that has a rapidly rising and gentrifying suburb right next door and even the same postcode, i'd look to Newcomb, just 3-4 K's east of Geelong.

You're very close to Eastern Park, Eastern beach, just a short drive into Geelong's CBD, and moments from Garden St and Ormond Rd's shops. Houses in East Geelong have attracted some very high prices, much of Myers St sells for $600K+, indeed even Helen St near industrial Carr St sold for $615K a few weeks ago.

Newcomb is the next suburb, and has prices which are still gettable in and around the $300K mark. David Shih, a fellow poster has actually invested in Newcomb very recently, i met up with him and he's done a lot of legwork looking around, not just in Newcomb but in other areas of Geelong.

Basically, not sure if Melton has any areas that command premium prices, but i reckon with East Geelong so buoyant at this stage, you can't go wrong with Newcomb. Yes you're further from Melbourne, but Geelong's it's own market and if you flip Geelong around, Manifold Heights is also well into the $500K+ territory, and Newcomb's the same distance from Geelong's CBD on the other side of town. Prospects of growth i reckon are stronger here off that base, East Geelong also has Edwardian and period housing that franks that area. It's a natural balwark to add substance to this area of Geelong.