VIC Investment Grade Suburbs - 750k budget

Hi Experts

What are the good investment grade suburbs to get an investment property for 700 - 750? I'm after something with really good capital gains, something that will double in 7-10 years, yet have decent yield.

Thanks

 

Op, you realise sydney’s 7% average a year rise over the last decade has been described as a massive boom right?

 

4-5%

 

After expenses ?

 

you’re dreaming. Can’t have both. You will need to decrease either your yield or growth expectations, then the forum will be able to assist.

 

i'd be happy with a 3 - 3.5% yield but more importantly a better capital growth

 

before expenses is fine

 

Do you want to add some of the value yourself or do nothing?

 

open to both as long as I don't have to spend on reno for first 5-6 years. Maybe add value to it at time of selling in 10 years

 

Is it a yeild story? Asking because a few blocks away a house on 700-800 sqm block can be had in Dandenong North or Noble Park North even. A few months ago it was even possible to get a house in Mulgrave for this coin.

 

Are you just targeting VIC or is anywhere fair game? Also how do you personally define investment grade?

 

Yields on houses are not bad either, for example, Rosewood Downs 3 bedders usually fetch 420-430 per week and up, so something like this:

4 Plymouth Court, Dandenong North, Vic 3175 and 2 Kiewa Court, Dandenong North, Vic 3175

will get around 3% yield before costs.

 

For me investment grade is something that will double within 7-10 years definitely although yield can be slightly lower

 

If you do look at dandy north I strongly suggest spending a lot of time on the ground.. the area varies drastically in its different pockets

I reckon you could still get in to Mulgrave down close to police road at that price point but fairly slim pickings

 

I don't know anyone who can provide an ironclad guarantee of the future price doubling in a specific timeframe. This is subject to not only "good" locations or local owner occupier demand levels but also the macro economic cycle, govt finance policy, global black swan events etc etc.

Capital growth is great(I am a huge fan) and we can certainly select markets with better than average chances of growth (based on some combination of demographic trends plus infrastructure growth plus supply/demand equations for current and future housing stock.) but predicting specific suburb growth is fraught.

One way to increase the gains on top of the market is by manufacturing equity (ie buying ugly homes under market and renovating or more full scale developing)

"Decent" yield is still a relative and fuzzy term. If you put numbers on it you can get more specific answers. Such as to have a minimum gross yield (ie 4%) or a maximum negative cash flow number (such as a property costing you no more than $50pw etc) that you are willing to tolerate then you can set a line in the sand and eliminate the areas that don't comply.

Or for cash flow management there are some specific things you can do in terms of the kind of housing stock you select or even doing some manufactured income doubling. These take work but can turn a negative property into positive territory, making the property pay its own way and protecting your serviceability for future borrowing power.

All the best with your research. Plenty of good wisdom here on the forum.

 

Wyndham Vale? Werribee?

 

If the property doubles every 7-10 years why would you want to sell in ten years ?
Are you expecting the rent to double every 7-10 years too?
I suspect a lot capital gain over the last 13yrs has been due to the lowering of the interest rate . If the interest rate do not fall by another 60% then CG may not be as good.