VIC Investing, do I have it all wrong?

Hi all - first post but really enjoy what this forum has to offer.

I guess I'll list my current situation. We are looking to get into the market looking at Brooklyn - Braybrook area as it fits well in our budget and offers what we are after. A brand new two bedroom unit or townhouse which offers stamp duty savings and taking what is left of the first home owners grant. I guess we are looking at this areas as yes, it fits in our budget, but with the proximity to the city this is appealing as we both work there. Looking forward 5 or so years, we hope to make good return on it and most likely rent it out. My question is, do people think purchasing a unit or townhouse will provide a decent return ? Provided that the area does for lack of a better word 'boom'

Thanks,
Daniel

 

All types of dwellings can do really well. I own units, Townhouses, homes, and duplexes and all have done well.


It’s not so much "can units or TH do well", its more, what type of dwelling is in most demand for the target demographic in the specific area".


All types of dwellings can do well if you:

1. Match the in demand dwelling type to the demographic and to the specific area

2. Bought well (right price, low strata if units, bought at the right part of the state cycle. )

3. Has room to add value (optional but i find it important, especially in the absence of CG).

just my 1.5 cents.

 

Thanks for your reply. I guess purchasing unit 1 is always going to help you in the long run as it seems to have the larger land. What did you mean by prolonged CG ?

I think buying well is obviously key. I'd love to know what people think of the area that I'm looking in and if they feel that it is over priced ?

 

Ignore prolonged. I deleted it.

Cant help you with the area as i'm not a Vic person, but many on here will be able to help you.

But dont only rely on what people say. Make sure you do your research, due diligence to understand values, recent sales, what the demographic want etc and then use the opinions of folks from here who invest in Vic to confirm your understanding of the research and for possible further insights.

Good luck mate.

 

My plan never included buying a unit in a strata plan but one came up with an opportunity too good to miss.

Just look at what you want to achieve and see what property can get that for you.

 

Units tend to have a better gross yield on them, which suits your intention to rent it in the future.

I'd almost say with your plan to live in the property that the financing side of the equation is just as important, if not more so, to the overall success of the investment. Getting your finance right on a purchase like that is step 1 because you can make a mess of the next step in the chain by not doing that, so seek a good broker in this regard and read up on this forum what you want to be doing on that front.

I don't know the market to know it but think of the target market as has been suggested, units appeal mostly to students, young professionals and down sizers, is that area good for any/all of those groups? Is there an oversupply coming online, are the strata costs reasonable (some can sink even what seems a good investment really quick).

 

Thanks everyone. All really good points and points I will take note of.

In regards to getting the financing side right, what are the things I should ask or keep an eye out for? We have been able to see a broker and getting the pre app this week. The structure of the loan will obviously follow depending on what we purchase the property for.

 

Brookly or braybrook are not the areas to buy units or townhouses as there are limited growth in those. first there are no main universities and not many famous schools in that area. You would be better off buying land 450-600sqm in braybrook since they present dual occupant or sub div. opportunities although if you ask me, you are stuck in btw sunshine and footscray and maidstone. Footscray would be better off in terms of landed units (not apartments) as there are so many shopping streets, restaurants and the median is rising in this area. there were no million dollar properties in footscray going back a few years now there was a 2mil dollar sale.. Maidstone advantage is that it is close to highpoint and is quite a high demand area targetted by vietnamese and chinese. Sunshine itself has its own shopping street which i feel is similiar to clayton which is also very useful for people who wish to rent.

I attended many auctions in maidstone, brayrbook and sunshine to build up my local knowledge of streets however if you work in the area and as PPOR there is more a lifestyle decision. however return wise rental returns are always best in high demand areas for schools and universities like clayton, mckinnon, bentleigh etc. Unit, townhouse prices have jumped where the suburb houses have become too expensive to buy such as camberwell, balwyn, burwood, box hill which unfortunately is only in the eastern suburbs of victoria.