VIC Elwood Flat - first home purchase

Discussion in 'Property Analysis' started by Zbdoh, 29th Sep, 2021.

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Is $751,000 a fair price for this property?

  1. Too high

    16.7%
  2. Too low

    0 vote(s)
    0.0%
  3. About right

    83.3%
  1. Zbdoh

    Zbdoh Well-Known Member

    Joined:
    27th Nov, 2020
    Posts:
    50
    Location:
    Bendigo
    Hi all, my partner and I have recently just purchased our first home.

    Initially it will be a PPOR, but in the next 3-5 years we aim to turn it into an IP and use cash savings +/- any equity to purchase another PPOR (aiming for a terrace house in an inner suburb).

    The purchase was very smooth thanks to our buyer's agent (more than happy to reccomend her if anyone wants to PM me). The "auction" was quite interesting. On the Sunday we bought it the REA informed our BA offers were starting to roll in, with the plan to move into a true online zoom auction at 5pm if there were still active parties bidding. We spent the day slowly being updated of the highest bid and eventually at 4pm we made our first offer and were lucky enough to win with that. In the end the sell price was $751,000 with the previous bid being $750,000.

    The property is available to view at: https://m.realestate.com.au/property-apartment-vic-elwood-137039118. The initial price guide advertised it in the low/mid 600's which was always going to be a low-ball. It's ~75sqm 2BR/1Bathroom, with the main bedroom being a great size and the second being quite small. As you can see the bathroom/toilet needs some work. The block is in good condition with it being underpinned in the past few years. The flat includes a car park on a 99-year lease (would prefer on title but realistically it doesn't impact things too much).

    It was last sold in April 2011 for $521,500 giving an average annual return of 3.7% (not amazing, but most apartments haven't performed well during that time period).

    Our plans moving forward are to repaint, resand floors, replace fittings and install blinds before moving in. Then redo the bathroom next year +/- installing reverse cycle airconditioning in the main bedroom + lounge pending how the home copes during this summer the coming winter.

    I'm interested to hear the thoughts of the community on:
    - Did we pay a fair price? Or was it too much / too little?
    - What do you think of old-style flats in inner Melbourne and how will they perform over 2021-2031?
    - What do you think of Elwood?
    - Do our above changes over the next 12 months sound reasonable?
     
  2. Hamish84

    Hamish84 Well-Known Member

    Joined:
    7th Sep, 2021
    Posts:
    678
    Location:
    Melbourne,Vic
    Congratulations, that looks like a beautiful home and an incredibly picturesque street!

    Can’t speak for Elwood or the market there, but being a boutique block so close to the beach, you probably can’t go wrong. Older style apartments (don’t call it a flat, it sounds like it’s a boarding house) in Melbourne have performed really well compared to modern apartments, you’ll be just fine :cool:
     
    craigc likes this.
  3. Ruby Tuesday

    Ruby Tuesday Well-Known Member

    Joined:
    8th Mar, 2021
    Posts:
    1,460
    Location:
    Danistan
    It is too high if you are going to turn it into an investment property, poor yeild , low or negative real terms rental growth , high and increasing costs, rates including interest, body corp fees, insurance, sinking fund may be low if underpinning has been done. There will be litle depreciation to claim. It maybe better to sell and put cash towards PPoR, any growth should be CG tax free while if kept for investment may have compressed yeilds . Take out equity from new PPoR to buy a high performance investment property. This property will destroy your service ability and greatly impede assett building for investment purposes. It will make a great PPoR and it is good you have a foot in the door and you have done the most importtant thing taken action.
     
  4. Traveller99

    Traveller99 Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    744
    Location:
    Settled
    Great work! Elwood is my fave suburb!

    You did well on the purchase. 700 to 750 would have been my go to number. I think you'll do well long term, it's just a matter of when unit prices start moving again.

    One thing to note about the area is the sheer number of units. Due to Covid, this has led to yields taking a pounding, so impactful that house yields have tumbled as well. Hopefully things pick up in 2022.

    Beautiful place I must say!
     
    craigc likes this.