VIC Cremorne (Vic) - should I?

Discussion in 'Where to Buy' started by Palzo, 4th Dec, 2017.

Join Australia's most dynamic and respected property investment community
  1. Palzo

    Palzo Member

    Joined:
    4th Dec, 2017
    Posts:
    6
    Location:
    VIC
    Hi All.
    seriously considering purchasing an investment property in a new development (Coppins Corner) in Cremorne in Melbourne with the plan to move there in 10+ years. Although very cautious about "off the plan" purchases, this one seems unique and ticks most of the boxes - position, growth, several business leasing commercial space (MYOB, Seek, REA, Disney, Uber, Car Sales.com etc.), so should be high demand from professional wanting to rent an apartment..i hope! Just trying to get my head around paying $620K-$650K for a one bedroom apartment. May mot leave much upside. Thoughts anyone?
     
  2. Palzo

    Palzo Member

    Joined:
    4th Dec, 2017
    Posts:
    6
    Location:
    VIC
    Not great a this - i seen to have posted this as a tread not a "post" - help!
     
  3. Westie

    Westie Well-Known Member

    Joined:
    19th Jun, 2017
    Posts:
    1,136
    Location:
    Melbourne
    Nah you're right. You create a thread and post in it, since you're the opening poster (OP), you're the thread creator too. Confused ya yet?!

    I'd recommend reading the dozens and dozens of threads about apartments. In general, they are not a good investment unless they're art deco or not many of them in a block. In addition, do the numbers stack up? Are outgoings >> than incomings? Are you able to hold and hope for CG? Always calculate the numbers. It's all about 'em numbers.
     
    private_number and Stoffo like this.
  4. Big Will

    Big Will Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,517
    Location:
    Melbourne, Australia
    It is located very well and close to the city.

    However what you are hoping is the value of the land is going to improve further than the depreciation of the building and that the builder/developer hasn't put to much margin into your purchase price.

    Me personally I am not a fan of the one bedroom for me if I was buying a unit I would look for 2 or 3 beds as you get much more options for renters with 2 beds compared to one and the people might stay there just a bit longer.

    For 2 beds it could be 1 couple using the 2nd room as an office, 2 single people, 2 couples, a couple with a child, a single person with an office, a single person or couple who has family visit them a lot.

    Compared with the 1 bed where you either get a couple (no kids) or a single person.
     
    Anthony Brew likes this.
  5. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,437
    Location:
    Melbourne
    Do you need a loan? How much?
    Follow up question: what's the floor space?

    The Y-man
     
  6. JamesP

    JamesP Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    166
    Location:
    Melbourne
    Surely rates will hit 9% within that time. Well maybe not surely but that's where all my eggs would go!
     
  7. Lil Skater

    Lil Skater Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,109
    Location:
    Melbourne
    As above, I would generally suggest a 2 bed at minimum. Gives you many more tenants to choose from and would normally be easier to sell down the track.

    Cremorne and surrounds have a lot of OTP apartments, when a lot hit the market at once it's not so easy to lease them out and could sit vacant a while - despite being in such a great location.
     
  8. Palzo

    Palzo Member

    Joined:
    4th Dec, 2017
    Posts:
    6
    Location:
    VIC
     
  9. Palzo

    Palzo Member

    Joined:
    4th Dec, 2017
    Posts:
    6
    Location:
    VIC
    Agreed Big Will but two BR start at $750K (67m2 & 11m2 balcony). I'm sure could get better value elsewhere but the position is a cracker!
     
  10. Stoffo

    Stoffo Well-Known Member

    Joined:
    14th Jul, 2016
    Posts:
    5,301
    Location:
    In the Tweed
    Hey @Palzo WELCOME ;)
    As per @Big Will , but, I also take into account the body corporate fee's
    Sometimes a bed sit works better than a 3 bed (over the road from a uni)

    I don't know the area, but using Sutherland/Kirrawee NSW as an example, great spot, but heaps of older units and literally thousands of new one's late 2017 into 2018.
    So the rental price point of the new one has to be lower to compete with the older one...........
    Sure, the new one is more desirable, but it is the tenants $$$s available that will dictate which one they will rent !

    So, take into account the other units and developments in the area, doing some research (due diligence) can save years of regret
     
    Last edited: 5th Dec, 2017
  11. Big Will

    Big Will Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,517
    Location:
    Melbourne, Australia
    I am sure I can find better value than the 1 bed ;)
     
  12. private_number

    private_number Well-Known Member

    Joined:
    22nd Jul, 2017
    Posts:
    152
    Location:
    Melbourne
    What's your goals with property investing? Is it to buy a PPOR for later, rent it out in the hope the tenant would assist you pay down your loan and in 10+ years you move in when mortgage payments are minimal? Or is this your foot in the market and you want to continue investing in property long term? Is this your first IP?
     
  13. Palzo

    Palzo Member

    Joined:
    4th Dec, 2017
    Posts:
    6
    Location:
    VIC
     
  14. Palzo

    Palzo Member

    Joined:
    4th Dec, 2017
    Posts:
    6
    Location:
    VIC
    Have purchased IPs in the past (wish I’ll hrkd onto a couple) but happy to say all performed well. Been out of the market for several years now. Your scenario about tenant paying mortgage and reducing debt and moving in 10 years is spot on do needs to hopefully obtain good CG as well as life style for the future. Obviously some concerns about potential oversupply of apartments, OTP issues if market declines etc. In saying that I “think” this particular development has much more appeal than many other developments I’ve looked at BUT expensive.
     
  15. private_number

    private_number Well-Known Member

    Joined:
    22nd Jul, 2017
    Posts:
    152
    Location:
    Melbourne
    Then you need to start looking at projected rental income vs holding costs (Strata, body corp, mortgage costs etc) whilst further looking into rental demand within the area (i'm sure you're looking into that now). Talk to agents, even attend opens just to get a feel. I'd look into how many other apartments are being built and could be potentially built within and potentially next to, behind or in front of said apartment/area too.

    If the numbers stack up, and you're confident that you can easily find tenants in the hope they can assist you in your plan to minimise your mortgage repayments by the time you move into the property in 10+ years, then do it.

    If the numbers stack up, and you're confident that you can easily find tenants but you're looking for a massive CG then i'd recommend otherwise.