VIC Investment Ideas

Hi Everyone,

I have recently decided to buy my First IP in Melbourne/Victoria and have been desperately looking for an expert advice. Finally I found this forum and I am so delighted to join this group and cant wait to hear some great inputs from the group

My budget is between $250K-$300K as I'm using equity of my current property therefore I'm on a very tight budget.The factors I considered before Buying an IP

Goal: To build a portfolio and save on Tax

1. Location: Melbourne or Regional Victoria

2. Annual Growth: 7 % to 8%

3.Future Goalotential Sub divide

4. Term: 5 to 10 years

Based on above factors, We looked into Melbourne Zone 1 suburbs but none of properties are matching my 3rd Point and budget. So we decided to look into regional Victoria .

Currently Bendigo/Geelong/Ballarat are doing well and I picked Ballarat as Bendigo and Geelong are very Hot in terms of pricing and locations and also commute time to Melbourne is less compared to Bendigo/Geelong

We are looking to invest Ballarat central/North/ Golden Point/ Black hill but I have also read some areas in East don't perform well ( for e.g Eureka)

I need ideas on what other suburbs to look for in melbourne or in Ballarat etc

Once again thanks in advance for your time and support

Kind Regards,
Bala

 

Hi @bala

You might have commute times a bit confused ? Ballarat is a longer commute to Melbourne than Geelong. Both by rail and road.

 

one suburb i think will fit the budget - werribee

 

@JacM : Thanks for your reply. Yes you are right but I think geelong might not fit in my budget where i need to find a IP ( including sub divide).

 

To me saving on tax is not a primary reason to invest..

 

Geelong's Northern suburbs (Corio/Norlane)

Price......Tick, Tick, TICK!!

Growth.....Hard to say 7-8%, but low entry cost helps, as does positive cash flow.

Commute times...Melbourne is 45-50 minutes drive with regular traffic, longer with a traffic jam but they are 60-65 kilometres from the Melbourne CBD. Bear in mind too, there are regional residents who have no desire to go to or have business with Melbourne anyway, and proximity to the regional CBD is often a better advantage for them.

Sub-division.....Yes, there are full blocks in Norlane for under $200K, and subdivisions are now a regular feature of this suburb. Some of 700m2 or more even allow three units.

Goal.....well my personal opinion is that it really can't go backwards, as Geelong's inner suburbs rise to levels significantly more than the Northern suburbs (only 5-10 minutes further out) i can't see the current prices doing anything but rise.

Just my two cents worth, the only thing is that you'll most likely get positive income, which will probably kybosh any tax savings you may have been planning on. But others suggest that negative gearing's not all it's cracked up to be anyway. I can't offer any advice on that aspect to you.

 

@Dave3214 : Do i have to look into specific areas in corio/norlane to avoid housing commission ones etc

 

There are specific areas of greater numbers of commission areas in both those suburbs. Broadly speaking much of Norlane West is private or non-Commission (aside from a multi unit complex in Lockett Ct) but more of the areas East of Thompson Rd have commission housing areas. In Corio (where most housing is brick, being generally late 60's onwards) the streets and courts starting with 'C' (Cloverdale estate) are quite nice, whereas a lot of the Fairbairn Drive area and the streets named after Aussie rivers have more of a commission profile. But virtually all this area is within a $250-$300K target. Over the road from my place in Dunloe Ave, a 4 bedder weatherboard place on about 570m2 sold for $225K at auction late last year.

 

One of agent recommended to look for IP in Canadian or Cardigan.The primary reason is properties are new and might have potential for STCA in future

Any thoughts

 

Hi Bala,

I think you need to refine and more clearly define your goals before zeroing in on any one particular city or area just yet.

You are looking for something developable within the next 5-10 years of ownership of it? Correct? At this price point, any equity you grow in that period will likely be used up fpr the development costs. What would be your intention of use for the dev? Will it be a duplex, triplex, 4-pack of villas etc.? Will you sell all, or sell some to pay out one or two that you continue to hold thereafter? Will you continue to buy other IP's throughout this period as well?

You dont need to have all these answers just yet, but you shoulf have an awareness of what outcomes this development will drive for you. This means that whatever area you choose, you need to consider what the demand might be like, for the final finished development you ed up building there. I.e. if you build say a 3-pack in ballarat down the track, what is the demand for them? What might they sell or rent for? Is Ballarat already oversupplied for this kind of housing stock etc.

I don't doubt Ballarat as a choice of location generally (did a bit of due diligence on it myself over the last couple of years), but I suggest you map out more clearly your end-game for any dev prospects. Maybe the first property could be better as a dev-potential house on a large flat block that will grow in value and then you could sell to a small developer later on, instead.

The only thing I don't like about Ballarat is the readily available land to the west. Already some large scale cookie cutter mini-mcmansion estates are going in there (about 5-10km west). What implication will this have for property markets in Ballarat Central/Canadian etc.?

 

How much do you think this has moved???? %

 

When i looked a while back it was in the high 200s-300s now it is all 300s. But you get the extraordinary sale of 825K for werribee south which will skew the median as well. but that it is close to the river/coast. i think it has moved 15%+ since i last was looking for the same product being equal (15-17%% from 260K is only 40K). My friend bought around 270K mark not too long ago.

 

That's why I take stats with a grain of salt.

Thanks, I heard it had moved significantly

 

there are still sales below 300K though you have to be careful of the bird cage /birdville areas (where there the housing comissions are). You planning to buy there ?

 

No, just keeping tabs on areas.
I am looking at something with plans and permits in place that makes sense. At this stage the cycle I want something I can build straight up.

What about Laverton?? cheap, small area

 

What's the commute to the CBD like? Is it viable?
Looks like there might be plenty of land available but it's also very affordable for those FHBers and OOers priced out of other areas.

 

Numbers (400k+) do not stack up in laverton especially if the permits are in place.

Everyone knows about the subdivision possibility there and the blocks have premium built in the asking price.

IMHO not worth the risk and effort.

 

Laverton is further in but that is where all the pt cook, truganina ppl take the train to the city. u will be too close to pt cook area (and housing estates) where is a lot of supply

looking at werribee south - i have driven around there didn't realize they are pretty ex and 2 years ago not much happening. nearly 500Kish for 500sqm plot of land. Then again, if you compare this kind of views of the bay coast to port melbourne, williamstown, st kilda (it is cheap). Even st kilda apartments facing the beach one sold by sam newman was 1.7m. If this part of werribee grows - this could be a million dollar area