VIC Invest 320k in Melbourne ?

Hi guys where would you invest if you had 320k for a 3 bedroom house in Melbourne? I'm thinking Pakenham, Hoppers Crossing/Werribee/Wyndham Vale or Melton/South Melton. Or anywhere else would love to hear?looking for solids capital growth over the next 10 years, decent rental yields.

 

Werribee if you can still get in at that price. Markets hot, and still moving now. Not many areas left in Melbourne that lets you buy in your budget. Try search engine to get an idea on the areas you mentioned.

 

Rental yields are low in Melbourne. Have you considered elsewhere?

 

Thing is Melb yields have always been low even when I was buying in 2013, if you jump into Melb it's a growth play, are we close to peak, don't know you will need to work that one out?..

Also Melb has highest stamp duty...growth ...otherwise forget it

 

You'll find these in in Melton/Melton South..

But have to agree with @Barny though... if you can stretch your budget alittle and get in to Werribee, you should see a quicker capital gain.. The market is hot and on the move.

 

Oiter west is not that enticing i dont think. When it was $250-300k then there was good growth potential.
I cant see values going past the 450 mark out far west
Some localised pockets of course will go past this as there is always people with money in almost every suburb who just live there because thats where they always have. Your bog standard home will still be competing against all the new estates that will keep popping up for the next 20 years, many which will be closer to the city.
The only thing that makes werribee, hoppers stand out is the infrastructure
Im not saying they wont have good growth but it doesnt seem like a no brainer. Melbourne os a very differemt city geographically to sydney and i think drawing conclusions based on what happened in outer sydney is not the best idea

 

I bought one in Logan last year. And was thinking to buy Brisbane again as the yields, but I feel Melbourne has better capital growth potential. Just finding where is the crystal ball question??

 

I think Weribee is a really good option. I will have to take a hit with the rental yields but I'm thinking the ship has sailed picking one up at that price I could afford. That's why I was looking in Pakenham?

 

Do you think that Pakenham could have potential for the future ? Or The land surrounding there to be developed will decrease the supply for areas further out due to the new buildings.

 

Yes I totally agree with the thoughts that Melton maybe not reach the potential that was seen in western Sydney. I bought in Logan 12 months ago and have seen some nice gains so I'm happy with that. Was hoping to repeat if I could in Melbourne.
The development of the land surrounding Melton would decrease to supply for the older stuff further west I agree. Do you have any thoughts on Pakenham or areas near buy. Or do you think with my budget stay away from Melbourne all together and hit Logan again ?

 

What yeild are you looking for?
Currently in Werribee from what I can see in the lower end is about dollar for dollar. Say you buy in at 330k you will get 330 week rent.

But remember Werribee is still moving in price now, so if it increases another 50k+ to match surrounding or near by suburbs, rents should follow at a later stage as long as demand is there, which it currently has.

 

Thats not to bad, just means my place will be slightly negatively geared or neutral geared. Just want to service my loan without eating to much into my lifestyle. But as you say might have to take a hit for 12 months until rent grow respective of capital growth. What about Wyndham Vale or Tarniet or are they too far from the trainline?

 

closer to transport always helps, but all those areas are going up in price as they are still affordable by most. But not for long, and I Like Werribee over the others.

At today's interest rates it will be positive cashflow from day one.
Pic below shows a 10 year old home with basic figures thrown in with costs, put in an average 80k wage earner, real depreciation figures and purchase costs etc.

At 4% interest rates you're positive $26.38 a week.
At 5% interest rates you're negative 19.46 a week.

Newer house might have better depreciation and change those figures slightly, or you get better rents. But it gives you an idea what the holding costs will be anyhow.

 

Brisbane is a big place .

Look at where both places are on the property cycle. Agreed..no crystal ball. However if you see Sydney and Melbourne trends...

High Returns > investors and owner occupiers jump in (cheaper to buy than rent for OO) > retutns disappear due to the rising prices....

Rinse and repeat. After expansion comes contraction.

So what does Brisbane offer these two other cities don't?

Brisbane IMO has the fundamentals and still better rent returns - both North and South

 

The bog standard home has more land so it will move in price as land estates values for land grow. For example...only 2 years ago you could have bought a 350sqm block of land in Tarneit for 170k...that looked expensive....now they area aobut 230k...this is just 10-15k less than Cranbourne/Clyde....this discrepancy corrected as people realised Tarneit is only 27 klms from town.....Cranbourne/Clyde is 45 klms.

This turn drove up prices in Hoppers Crossing/Werribee ...older suburbs where infrastructure existed but were cheap. For example...despite a few forum members saying you can't make money on Werribee....my places are now 450k (Hoppers) and 385k (Werribee) respectively...they were bought for 170k and 130k.

Not correct...I agree it is bit harder....but the returns are no different to Brisbane. I am getting about 6.5% on my new house and land packages with about 80k equity on a spend of low 3s. You can still do this if you look hard....other people @Connor @Cactus are doing this also.

People lumbered into Brisbane and ignored Melbourne...the later has significantly out performed....though Brisbane's time will come.

It was similar when the debate on Moreton Bay vs Logan was had...Moreton Bay has out performed also....

 

Cheers for running those numbers Barny, I'm a newbie to property investing and any information helps. I will endeavour to seek a property in Weribee but I'm feeling That I might be priced out and will need to look a bit further out. (Don't really want to be a unit or town house either) I can't see these affordable places going down. Do you have any thoughts on house and land in Tarinet area. I see a lot being advertised?

 

Well that encouraging to know. I think I will need to choose a State and stick to it, otherwise I will get too bogged down and never end up purchasing anything haha. Do you have any suggestions of suburbs in Brisbane. I own one in Waterford West currently but was thinking to purchase else where other than Logan?

 

Anywhere 'well located' - whether North or South - close to shops, transport, infrastructure.

 

House and land is @sash @Cactus @Connor specialty.
I bought older house on large block near schools/shopping/transport with potential to subdivide.

 

@Brett1709 just looking and past sales, not sure 320 is going to get you a house in those areas in Melbourne. Bigger budget needed.