VIC Investment Grade Suburbs - 750k budget

Discussion in 'Where to Buy' started by varun80, 27th Nov, 2019.

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  1. varun80

    varun80 Active Member

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    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
     
  2. The Y-man

    The Y-man Moderator Staff Member

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    What would your definition of "Decent yield" be?

    The Y-man
     
  3. Trainee

    Trainee Well-Known Member

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    Op, you realise sydney’s 7% average a year rise over the last decade has been described as a massive boom right?
     
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  4. varun80

    varun80 Active Member

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    4-5%
     
  5. Beano

    Beano Well-Known Member

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    After expenses ?
     
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  6. housechopper2

    housechopper2 Well-Known Member

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    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.
     
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  7. varun80

    varun80 Active Member

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    i'd be happy with a 3 - 3.5% yield but more importantly a better capital growth
     
  8. varun80

    varun80 Active Member

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    before expenses is fine
     
  9. BuyersAgent

    BuyersAgent Well-Known Member Business Member

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    Do you want to add some of the value yourself or do nothing?
     
  10. varun80

    varun80 Active Member

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    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
     
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  11. The Y-man

    The Y-man Moderator Staff Member

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    I'm going to stick my neck out here - units (yes units!!! :eek::eek::eek::eek::eek:) in Noble Park.

    The Y-man
     
  12. Mouse

    Mouse Active Member

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    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.
     
  13. BuyersAgent

    BuyersAgent Well-Known Member Business Member

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    Are you just targeting VIC or is anywhere fair game? Also how do you personally define investment grade?
     
  14. The Y-man

    The Y-man Moderator Staff Member

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    It would be sure better for CG to get a house but the OP wants 3~3.5% yield which might be easier for a unit. Also, I am seeing some pricing already factored into houses, whereas the older units seem a bit unloved? (everyone going for new shiny things).

    Say something like this for $400k:
    2/12 Aenone Avenue, Noble Park, Vic 3174

    Rents for say $320pw like
    2/143 Buckley Street, Noble Park, Vic 3174


    48 weeks rent (allow 1 month vacancy) = $15,360

    3.8% yield before costs.

    In 10 years time will it be worth $800k? Plausible me thinks.

    Yield would definitely improve with a new kitchen and bathroom makeover.

    Anyway, threw it out there as a discussion starter as no other ideas seemed to be forthcoming :).

    The Y-man
     
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  15. Mouse

    Mouse Active Member

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  16. varun80

    varun80 Active Member

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    For me investment grade is something that will double within 7-10 years definitely although yield can be slightly lower
     
  17. korando1234

    korando1234 Well-Known Member

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    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
     
  18. BuyersAgent

    BuyersAgent Well-Known Member Business Member

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    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.
     
  19. Never giveup

    Never giveup Well-Known Member

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    Wyndham Vale? Werribee?
     
  20. Beano

    Beano Well-Known Member

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    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.
     
    Last edited: 17th Dec, 2019