A happy off the plan purchase

I read so many horror stories of people buying off the plan so i thought I'd post my happy story of one.

About 18 months ago, paid a 10% deposit on a 2 bdr townhouse in Avondale Heights (VIC).
Purchase price was $480k.
Settled on the place today with the bank valuing it at $650k. Not a bad return at all

 

Agree, timing is key

 

Nicely done! Awesome to hear a positive OTP story for a change.

Cheers

Jamie

 

nice one there.

 

Nicely done.... You have done well! Melbourne's Western suburbs have had a solid run in the last 3 or so years! I also managed to secure a 2 year old townhouse in nearby Sunshine West - about the same time as you bought your OTP - and achieved a similar result! To be fair, it was because of the advice I received from a local buyers agent

Of course now we will both need to be a little patient

Best of luck!

 

Congrats on your purchase also.
As a buy and hold purchase I'm in no rush

 

Thank you

 

Congratulation. Is it the estate developed by Fraser?

I also bought OTP townhouse in Westmeadows VIC in Aug 2015 for $410k with 5% deposit. Settled in Sep 2017 with bank valuation of $530k. So my view is that OTP is not bad, it is the type of stock and of course timing determine the quality of investment.

 

I'm glad that you did well out of it @Chill2205. As you'd know for OTP to do well, you need to buy in a rising market, not have a change in circumstances that would affect your ability to get finance for settlement, banks still willing to lend, developer that does not substantially change dimensions or inclusions, or go broke mid-way through, just to name a few. But for you the planets all aligned - so congrats. Just don't think it was you that worked all that out and you can do it again anytime you like .

 

OTP is also great for another reason.
Many people don't want to wait. Or take risk.

They are happy to pay more for a finished product.

So the up side in OTP is not always dependant on a rising market.

In many parts of the world OTP is dangerous as builders take deposits and run. So when coming to Australia they bring the same mentality and don't invest this way.


I know of much more positive stories of OTP than negative.

Obviously in a falling market no one wants to hold the falling asset.

 

Great news!

 

That's the one. Is your Westmeadows purchase also the Frasers development?

 

As it is impossible to predict everything, though you can mitigate risk by doing your research and due diligence. I agree it's not something you can always get right, but can pay off well in a rising market with minimal initial cost

 

Yes, it is Fraser. I was interested in the Avondale project too end of 2016 but decided to buy an established property instead. The gain you got is super. The only thing I do not really like in those types of development is body corp which significantly reduces your net yield. What are the estimated rent you can get?

 

Nice one, you will do well in Westmeadows in the long term.
Rent is 440 p/w, which gives a gross rental yield of 4.7% Not bad in the current melb market.

 

OTP works exceptionally well on land with the proper due diligence.

I bought 3 blocks of land in Geelong for 132, 140k, 155k...around this time (April, July)....they are now worth 210k, 240k, and 280k. What is even better the total build costs are 325, 255, and 375k and they will sell in excess of 550k, 600k, and 680k respectively.

 

Good for you.
I think OTP townhouses are a much better proposition than big complex OTP apartments where it could be 3 + years before they are completed and are much more skewed in the developer favour.

 

Agree. I think if you do a proper DD then H&L (you source your own builder) > OTP townhouse >>> OTP apartments (esp. super high rise with heated swimming pool)

 

Wow nice work. Is the plan to sell or keep them?