Investment in 2 bedroom apartment in blue chip suburbs

Discussion in 'Introductions' started by Bhavik Bhatt, 19th Feb, 2019.

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  1. Bhavik Bhatt

    Bhavik Bhatt Member

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    Hello all.
    I am a first time investor and so would appreciate your feedback on considering two bedroom apartment in hawthorn, toorak and northcote.
    I do understand that apartment is never a preferred choice of Aussie living but considering a hassle free less expensive way to enter the market do you think it is a positive geared investment? Has anyone had any bad experience with apartment investment losing equity over long term?.
    I have been looking at old apartment in toorak and hawthorn. Not the high density buildings. Any thoughts?
     
  2. Trainee

    Trainee Well-Known Member

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    What hassles do you expect to avoid?
     
  3. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    Why Melbourne at this point in the cycle?
     
  4. Bhavik Bhatt

    Bhavik Bhatt Member

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    I mean apartment are much easier to maintain in terms of repair etc. Just after few feedback if anyone has owned apartment in Melbourne over last few years. Has renting out been easy? Etc
     
  5. Trainee

    Trainee Well-Known Member

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    Compared to what? How do you consider body corp fees here?
     
  6. Trainee

    Trainee Well-Known Member

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    Bad question to ask, given where the cycle is.
     
  7. Bhavik Bhatt

    Bhavik Bhatt Member

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    Why is it so difficult for you mate? Compared to a house not a ship.
     
  8. thatbum

    thatbum Well-Known Member

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    Depends what you mean by this. Personally I have apartments a much bigger hassle to get maintenance and repairs done since there's usually a strata company that gets in the way.
     
  9. Bhavik Bhatt

    Bhavik Bhatt Member

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    That's a good point mate.
     
  10. Trainee

    Trainee Well-Known Member

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    Because i dont think youve thought this through and are making decisions on bad assumptionsz

    You pay body corp for a unit. You dont for a house. Why are repairs more difficult (do you mean expensive?) for a house taking vody corp feed into account? A house you control.
     
  11. The Y-man

    The Y-man Moderator Staff Member

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    2BR is better than 1BR, but make sure it is a "real" 2BR - not just a 1BR + partition (have seen this). Work on floorspace > 60sqm. If it has a separate toilet, better.

    Sold my last 2BR during GFC, and still hold a 1BR that has been a CG disaster (no growth 10 years in Prahran). Vacancy is never an issue, but rents can be very low, so do your homework.

    True the OC handles most repairs as long as it is active and there is no one stopping things.

    Your question regarding +ve gearing is easily answered:

    Take:
    1/107 Victoria Road, Hawthorn East, Vic 3123
    $550k to buy + 7% fees/stamp duty

    same area;
    6/109 Victoria Road Hawthorn East Vic 3123 - Apartment for Rent #425823930 - realestate.com.au
    $420 pw rent

    420*52*0.90=$19,656 income after management fees
    Allow $4,000 for rates, maintenance, insurance = $15,656
    Max you can borrow @5% interest = $313,120

    MAXIMUM LVR = 53%

    So you will need 47% deposit to even break even on cashflow, and that is not allowing for any vacancy, refurb down the track etc.

    The Y-man
     
  12. Bhavik Bhatt

    Bhavik Bhatt Member

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    Yes mate I meant expensive. Being from an Asian country, apartment investment is something I have done few times and have made good profits overseas. I find it quite opposite in Australia. Thanks for your input.
     
  13. Trainee

    Trainee Well-Known Member

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    What does opposite mean here? Youve lost money on houses? Question your assumptions.
     
  14. Bhavik Bhatt

    Bhavik Bhatt Member

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    I meant apartment.
    I owned two houses in melMelbou and made good equity. I never considered apartment investment before close to CBD so was researching recently.