VIC First time with $300k budget in Melbourne

Hi Everyone!

I am a long time reader and I thought it was time that I added something to the forum!

Bit of background, I am 24 and own my current PPOR. I would say market value is around 320k and I owe $250k, so I am happy on that front.

I nearly purchased an IP several years ago, but I ended up getting cold feet and have regretted it ever since, so lesson learned on that front.

I have been looking around Melbourne and have noticed I could (hopefully) pick up a one bedroom unit in Newport for around the $300k mark.

Some other areas I have looked at are oak park, Jacana and St. Albans, however I feel I have already been priced out of those markets for something that would be a good property.

Given Newport is close to the city, near the beaches etc I think the fact the unit is 1 room is outweighed a little.

While I would love to aim a bit higher, I am limited at the moment for borrowing capacity due to a lowish income (this be roughly doubled in 5 years)

I guess where some advice would be appreciated is whether people think it is worth going for the unit in newport or holding off for a few years when I have a higher borrowing capacity.

Any advice would be awesome!

Cheers

Mitch

 

Personally I would hold out until you can get something your inner investor wants to target, rather than buying simply because you can afford it. Property investments are (generally) long term, so don't rush it. We won't be seeing the growth of the last 5 years so the pressure is off.

 

Thanks for the wise words! I feel like if gotten under market value it could be a good purchase (I guess anything under market value is though) given the location, however your thoughts make lots of sense

 

Another strategy for you could be to go interest-only on your current PPOR then in 5 years upgrade and convert your current one to a rental. By going interest only, you'll be maxing out your savings potential and tax deductable loan. depends how much capital gains you have already made, but if there's not much in it then this could be a more financially viable option than selling it.

 

I am actually in the process of changing this over at the moment for this exact reason
I brought the property with the intention of living in it for a few years and being closer to work. After this I plan on renting and keeping the current PPOR as my main residence for CGT exemption and using it to bring in some extra cashflow.
I think for the moment it is probably better to stay pat and look at getting a better base for investing in a few years time.
I have also been looking at Adelaide but the thought of investing interstate is something I need to get my head around!

 

Newport is a pretty good location, there are some smaller units on Melbourne road, but that has a stack of traffic. Very quick train ride in from the premium Newport station with some nice parks and lakes, good local gym and 25m pool, plus easy access to freeway, beach at Willie and Altona North shopping centre is decent. What size 1 bedrooms are you looking at? I bought an old 2 bedroom unit there in 2014.

 

It's like you mentioned, a small one bedroom near Melbourne road. It's walking distance to the station which I think is a massive positive, and the commute to the city from there on the train is also pretty easy.
You have done well to get that unit, you would be sitting on some nice growth there!