First Investment Property Advise and Guidance

Hi All,

It's my first post here and thank you all for taking your time to read me.

I am young professional living in Melbourne and I got some savings on the side that I would like to invest in the property market. On the web you come across many (too many) information/reports/stats etc. and I wanted to ask to actual real people what it is out there at the moment.

Shall I hold back until the prices come down (potential plunge at the start of 2019) or I shall I buy anyway considering that the property would be leased?

Thank you all, and I look forward to being part of this big community

 

I know a guy who had been waiting 10 years for prices to plummet. He is still waiting.

 

I'm no expert, but your questions are a little too general. Where are you looking? NSW, VIC, QLD, WA? The different states and even different parts of the same city are different markets. What are you looking to buy? 2 br apartments, townhouses, or house and land? The property will not always be leased. You have to consider location and supply carefully.

 

Welcome @Marco Bon. You'll learn lots here so stick around.

What makes you think prices may plunge in 3 years?

As far as buying, I can report I have a lot of clients picking investments up at the moment, most of them houses in and around Brisbane. The numbers work well.

 

@Marco Bon you're well ahead of the curve even thinking about these sorts of issues.

Timing the market is hard, even in shares (which tend to fluctuate more often) professional investors are generally unable to time the market two times in a row.

Given that every investment carries risk, how would you feel if you were to lose capital? What are the opportuning costs of waiting another few years?

It can be interesting to look back at the track records of the 'experts' who are currently predicting a crash in 2019, have they consistently had the correct predictions? If they can accurately predict the market, why are they sharing this information with you, instead of sunning themselves on a private island?

 

Hi and welcome aboard

Property is about long term wealth creation - it usually won't make you rich overnight. So having said that - I believe time in the market (how long you hold the property) is just as important as timing the market.

Terry's post is a good one - I've had clients waiting for Sydney to drop for years......

Cheers

Jamie

 

Thank you all for your answers. I am located in Melbourne and interested in 1 bedroom apartment with a car space within 5-6km from the CBD. Ideally I would like to rent it out but again, I am at zero knowledge and this is why I am herr

 

Why an apartment?
Why 1 bedroom?
I would argue for a 2 br, as they achieve better rental yield and resale value.

What is your purchase price budget?
What is the strategy around this investment?

Seems to me you are mixing lifestyle choices with investments.. Eg live in it now rent out later.
I hear this time and time again.

I'm not sure CBD or CBD ring apartments are of any value, especially 1br ones at this stage in the cycle/building approvals in process..

 

From what I've read is that there will be an apartment oversupply in Melbourne's CBD/CBD ring. So you must be careful! A boutique building/art deco may be fine... anything else I'd give a big miss.
All of Greyghost's other comments are very valid points too.
Think about it...

 

I started off buying 1 bedders 6-7years ago in Sydney. They're all positive geared now and have almost doubled in value. It worked for me.

You need to work out the numbers, yield, costs. Then you'll need to consider the capital growth in the next few years.

OTP, apartment, Melbourne : those 3 words screams out 'newbie' to developers and salesmen. Don't get suckered in.
Unless it's your plan to sit on an asset that won't appreciate for a long time.
I'd suggest opening the possibility of being a rentvestor instead and buy where the property has good cashflow, yield and growth prospects then go off an rent where you fancy (that suits your lifestyle).

 

Was a good starting point 6 years ago, replicating this in 2016 is a dangerous prospect though!

 

Welcome to the forums !

I'm worried about the proposed strategy. Do steer well clear of the apartment oversupply zones in the highrises of Melbourne and the Docklands.

Perhaps take a different approach ... rather than focussing on 1bedders near the city, perhaps determine the spend limit with your broker and from there determine what that can buy you and where.

If you don't have a broker in your corner as yet, that'd be a great place to start. Four well-respected brokers have responded already (@Terry_w , @Steven Ryan , @Simon Moore and @Jamie Moore ) - perhaps get in touch with one of these boys and go from there.

 

Thank you again all,

My goal is to buy to rent and not to sell, as my wish is to move to another country where the cost of living is much lower and a clean rent income would be enough (for someone like me who lives with small).

I have just returned from a seminar by Julio De Lafitte (I leave the comments to you).

I am here and out there to gain knowledge and to ensure to don't walk blind folded into such a huge market, hence I appreciate each one of your responses.

The reason for my 1 bedroom with a car space is because I thought it had more demand (professionals and young couples) as per vicinity to the CBD (work) and the higher cues on open inspections for rental properties compared to 3+ bedroom houses further out the city.
But again, I am open to any of your comments.

 

I know this gets thrown up a lot but you might want to consider working backwards. Ie. What is your end goal / what are you trying to achieve? Then try and develop a plan to achieve that. Get a broker onside who knows investments and then maybe thinking about what / where to buy. Just buying for buying's sake will probably end in pain.

Having said that I don't think you'll find many people recommending apartments in Melbourne CBD on here.