VIC Investment strategy in current market, where to buy?

Hi all,

I'm new to this forum, I bought my first PPOR 2 years ago in Point Cook. I'm looking to get my first IP from refinancing my PPOR. With my current financial & market condition, I can't afford anything beyond 500k.

I have a look in the current market and with 500k i can still get these investment opportunity:
1. House in 500 sqm land in:

• West (Werribee/Hoppers crossing) - Would this be too close to my PPOR (it's like putting all my eggs in one basket?
• North (Mernda/Doreen/South Morang)
• North West (Taylors hill, hillside, sydenham)

2. Townhouse/unit/apartment (might only get 2 bedrooms) in inner suburbs (like preston, coburg, altona north, etc)
3. Sell my current PPOR and get 1 PPOR in a nicer area (SE suburb for example).

Question:
With the current market condition, is it better to chase capital gain (with option no 1) or trying to get possitive gearing invesment with option no 2? Some of my colleagues also suggest to get apartment in the city and rent it out via air bnb. (Don't really like this option since I don't think there is future growth for this type of investment).

 

@propertynewbie

Melbourne has grown significantly. Hearing from a local BA the other day, there is market softening that is happening.

What do you want these properties to do for you?
How will buying these make your life better - now and in the future?
What is your sttrategy

Apartment in the city may give you a higher yield (in Melbourne) however will the supply give you capital growth?

 

I’m seeing lots of investor activity in Geelong, Ballarat and Bendigo for that budget. And a freestanding house, with development potential, is the most sought after option.

 

Hi @propertynewbie, welcome!
I was just in your position before I purchased an IP in Geelong (Herne Hill). I was also looking at Werribee/Hoppers Crossing but ended up being priced out of that market with the area I wanted to invest in - but as you've indicated you might not want to have all your eggs in one basket. I didn't look into the other suburbs you've mentioned as I hadn't heard much about them at the time, however, if you've found supporting evidence online indicating prospective strong market conditions in those areas then maybe they might be worth exploring further.

I invested in Geelong for a number of reasons, including; local/state and federal planned infrastructure projects, location to Melb and the Surfcoast, public transport options and properties in my allowed budget. My property will be slightly positively geared and I'm expecting reasonable capital growth (5%-7%).

Definitely worthwhile exploring the questions posted by @Property Twins first to understand what you want this next purchase to achieve.

Best of luck!

 

Would the SE suburbs be better for you/your family's lifestyle? - eg schools, commute to work

Could be a good opportunity to trade up to a better suburb and borrow at record low rates for future CGT free capital gains.