Dream house or investment block

If you only have this budget, which allows to only go for one shot, which would would you choose?

* Buy a dream house in your dream suburb but with smaller block of land (prob less than 400sqm)
* Buy an investment block in outer, growing suburb, with big size of block and very old interior (over 800sqm)

Reason i asked is...many ones i know personally, had done the second option, and even they had made a fortune from it after few years, they still told me they regret they didnt get their dream house first...because even now they still can't afford to get into the area....?

 

I don't understand how you can regret not buying something you couldn't afford to buy in the first place

 

Depends on what your goals are.

Before we even thought about property investment, we bought the 'dream house' (although on bigger land), and took on an almost 750k mortgage. Now our servicability is peaked at 2 IPs. Would be a different story if we were rentvesting.

 

If you can afford your dream PPOR then I would go for it.

Lifestyle is important and I think better to be happy where you are living.

We still live in our family home of nearly 40 years and love living here. Sure we could cash in and live somewhere smaller or in a cheaper area, but not all decisions have to be based simply on financial outcomes.

If both options you gave are IPs, then that is an entirely different matter.
Marg

 

2nd this.
Get your nice PPOR.

 

The scenario was, if you could afford either.

 

The budget affords a PPOR in a dream suburb, probably need to scale down the land size, for example go for a townhouse or unit style.

Guess my question should have been, if you would prefer a townhouse/ unit house in a dream suburb (to be able live in now) vs a full standalone house with large land size in an outer suburb (purely for investment point of view if that was the case).

 

Same reply. If that is truly where you want to live, then what not go for it. Unless, of course, you would be just as happy living in the outer suburb.

Flip a coin. You will know by your own gut reaction to the decision whether it is the one you deep down truly wanted to get.
Marg

 

So is it possible that an investment block like that could grow faster than a smaller block in "dream suburb"? Or generally less likelt?

 

We did the "dream house" thing first, yep it will set us back a bit in terms of investments etc but we had a large chunk of cash which we probably wouldnt have again for a long time and we wanted to do it while the kids were still young and get to enjoy it too (no chance of renting what we bought). We are only young ourselves so have plenty of time to build up our fortune.

 

Anything is possible.

However, given the choice, I would go for the more desirable location. Scarcity is the main driver of price growth. Prices will rise if buyers outnumber sellers in a given area, as more are competing for fewer properties.
Marg

 

Hm... in the dilemma of deciding whether to just ignore the "dream factors" (e.g. standalone 700sqm house) and just settle for a smaller "dream house" (e.g. townhouse, unit house) in a "dream suburb". Or use that money for investment block in growth suburbs....to make some profit in order to get a bigger house in those dream suburbs? Second option is fun but it's more like a betting game.... and given the current talk of tightening, not sure whether prices can keep firing like now....