Looking for best 1st IP location

Hey guys, pleased to be a new member of this forum. I'm just starting my IP journey and am still very new to the game. At this stage I'm just about to get my pre approval finalized. I'm hoping to have a budget of about 500k. I'm just wondering what suburbs and property type to look in. My goal is to make instant equity off the property so I can buy a 2nd place ASAP. Thankyou in advance for the suggestions .

 

Hi @Samuel Bennett

There are a number of markets in Australia, and then there are markets within markets.

What city are you referring to?

 

Sorry I should of added that. I'm looking to buy in Melbourne.

 

The suburbs you look for would be dictated by your finance, so definitely have that finalized first so you know your exact budget before you start doing your research otherwise you could be wasting your time & effort.

I would also suggest you have a read of this discussion thread, it should help you with some idea of "instant equity"
Is there such a thing as "instant equity"?

My 2 cents on your goal of instant equity:
1. You have to know a suburb really well in order to buy below market value in a rising market
2. Buy something that has potential for value add so you can manufacture equity

Point 1 will be challenging as you need to know a suburb really well and inside out. It can be done but takes a lot of time to do thorough due diligence plus asset selection, and also you would need the suburb to be going up in value. As you would see from the thread above it can be challenging even for experienced investors as lots of elements are beyond your control, so prob not as recommended.

Point 2 is a strategy that more investors are deploying in the current environment. You buy a property that has some scope of value-add, and then you spend say $10K to do cosmetic reno and then get it re-valued by bank afterwards returning $20K extra (or more) on top of your purchase price. That's extra equity for your next IP. With this approach you have more control on what to reno in order to get the max bang for buck - but careful not to overcapitalize too.

Cheers,
David