400m block- thoughts.

I'd like to know experienced investors thoughts on buying an IP on a 400m block in Melb.
3 bed house, in an inner city suburb, but the block has been subdivided, was originally a 600m block which is the average house block size for the suburb, but is now only 400m with a house on it. The separate sold off 200m block has a townhouse with its own frontage (corner block).
The house I'm looking at still has potential for 2 townhouses with a frontage each going by what I've seen in the area.
Is a stand alone house on a block this small a bad investment? My strategy is buy and hold, (10 years plus-hopefully never sell, to build equity to accumulate more properties). Would have liked to buy a house on full sized original 600m block in the same suburb, however my budget no longer allows as these fetch 580-700k.
I can buy the house on the 400m block for 400k.
I'm pretty much sold on it unless anybody can tell me if there's any reason I should steer clear?
House is 60s build but really good condition and has already had a bit of a cosmetic Reno about 10-15 years ago. Brick veneer construction, on stumps. Suburb with 15kms of CBD- a suburb id happily live in in Melbs north

 

Which suburb, 15 km from the city?

 

It is in Glenroy. The more I have thought about it the more I think I should look elsewhere for a house on a 600m2 block. My gut feeling is a 400m2 block will put a ceiling on any growth. I'd really appreciate thoughts on this.
I think now my only other options are Sunshine/Ardeer..

 

My PPOR is on an already-subdivided corner block with 495sqm. It's within 30km radius on the east. The current growth has lifted it up nicely along with other full block ones and hopefully, it will keep on growing.

 

If you have to sell, who will be your target buyers? Will the small land size limit your market?

Yes, you may intend to hold long term, but in this world $&@&$ does happen and changed circumstances may necessitate a sudden sale.

Always consider an exit plan.
Marg

 

I wouldn't have considered Glenroy as 'inner city.

 

And nor would anyone commute to the city from Frankston or Point Cook either.

 

My target selling market would be young families/ couples who are priced out of the full sized blocks in Glenroy.
At the auctions yesterday for the 600m blocks it was mostly young couples and families, however there was talk about a lot of the properties going to developers.
The house I looked at on the 400m block would have a decent sized front yard if I enclosed it with a full height fence.