VIC First IP suburbs

Hi Everyone,

I have approximately $100k that I have taken out from PPOR (equity) and looking to invest. Have been reading the forum for few weeks and decided to start a thread to get some advice.

I have a pre-approval loan of approx. $550k. This is the maximum that I can borrow at the moment. I would like to get something below this price to ensure I am able to top-up the rental to pay the mortgage if the interest prices go up.

Here are some of my questions:

1) Where would you invest if you had $550K for a 3 bedroom house in Melbourne? Which suburbs are booming or about to booming?
2) Should I look for a house, townhouse or a unit?
3) Should I think of an established home with a big land to sub-divide in the future or ditch this plan as i am only starting in property investment?

I am looking for solid capital growth over the next 10 year with high rental yield.

Would love to hear and take some feedback onboard.

Thanks

P.S.: I also have a finance questions which I will raise in the Finance thread.

 

@afterbuddha - as cliched as it sounds, what's your strategy?

Before considering what area to buy an investment in, consider the following 5 KEY points...

1. What's your goal? What do you want property to do for you? Where do you want to be in the next 5, 10, 15 years’ time frame?

2. Figure where your considered area is on the property clock? What is the rental yield available right now? For instance, when Sydney was at the bottom of the market, the rental yields were 7%+ to even 9%, now with Sydney having grown a lot, these rental yields have dropped to low 4% even in the Greater Western Sydney! When was the last peak of the market? How long has it been stagnant (or growing)?

3. What are the fundamentals in the area? Is there Government, private, commercial spending? Are there the likes of Woolies, IKEA's and Costco's showing up? Piggy back on their research. Is there more infrastructure / development - trains, roads, schools, hospitals etc.? This is what will attract home buyers and tenants to the area by improving the desirability of the area and due to increased demand push the prices up (provided the rental yields are still present and the investment makes sense)

4. What’s your borrowing like? Figure out a lending plan on how you will go from purchase 1 to purchase x (depending on what’s possible for you with your current resources). Focus on the big picture for your portfolio and not just a fraction of your portfolio. Because when a market rises, the tide lifts it all

5. What's your strategy? i.e. What is negotiable for you and what is non-negotiable for you? One size does not fit all. Figure out what will tick your boxes, such as what is the block size that you want? How should the location be (personally we like very well located properties, within 1km of a train station or a major shopping centre - that's what gives the property an upside for future development)? What should be the minimal rental return (We like neutral / positive cash flow, okay with some negative depending on the property type and it's upside. Make sure your risk is mitigated)

 

Awesome.answer.
Usually the first one will be cheapest.

 

You said this is in this price range.
Is there another price range where you can get a little more than 8% total?

 

Thanks for the reply Property Twins.

Wow there is a lot of consider when it comes to buying an investment property!

I have done a bit of research but totally novice when it comes to investment strategy.

My overall goal is to increase my wealth and attain financial freedom.

The current goal is to learn what people do, how do they do it, what are the strategies, how do they structure their loan.

 

With clarity comes certainty. If you don't know what you are looking for, then everything will look the same.

 

As i am only starting, i would choose this.

Want calculated risk and at least moderate growth.

 

Thank you Y-man. Appreciate you taking the time in creating the thread.