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VIC Maribyrnong, South Yarra

Discussion in 'Where to Buy' started by melbpropinv, 10th Mar, 2016.

?

which would you buy

  1. South yarra apartment

    25.0%
  2. Maribyrnong townhouse

    75.0%
  1. melbpropinv

    melbpropinv Member

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    melbourne
    Hi all
    New poster. Just want your opinions pls
    What are your thoughts in buying a established townhouse in Maribyrnong (say, waterford green estate), land size about 250 sqm to 330 sqm, about 16 years old, between high point shopping centre and Maribyrnong river, yield 3.4% conservatively.

    compared to buying a old 70s apartment in South Yarra, (say, Rockley Rd or Kensington Rd) in a block of 12, at least 85 sqm internal, yield about 3.3% plus.

    Which would be best from capital gains perspective with budget of $750k.

    Thanks
     
  2. JacM

    JacM VIC Buyer's Agent Business Member

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    Well... you will be pre-paying your own capital growth for the first couple of percent per annum due to low yields. So in a way the first 2% of growth doesn't count because you will be paying for it with out of pocket expense (paying mortgage interest). What is your goal ? It may be that neither of these areas are aligned with your target.
     
  3. melbpropinv

    melbpropinv Member

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    Goal is capital growth. rental yield comes second.
     
  4. JacM

    JacM VIC Buyer's Agent Business Member

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    Hi @melbpropinv , do you happen to have a measurable target in mind... such as "a rent roll of $x per week" or "equity of $x" ?
     
  5. melbpropinv

    melbpropinv Member

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    Thanks Jacqui. Aiming for 7 percent growth if it's still possible. Will hold long term 10 years plus. For either of these properties target rent is about $450 pw at least.
     
  6. JacM

    JacM VIC Buyer's Agent Business Member

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    OK. So setting aside this particular property purchase, what is your end goal? Regardless of how many properties or transactions it takes to get there, what do you want to have at the end of it all?
     
  7. albanga

    albanga Well-Known Member

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    @JacM is correct about setting your goals first BUT for the sake of answering your question. I personally believe the Maribynong townhouse over a 10 year hold will out perform South Yarra.
    South Yarra is a bit close to the CBD not to feel the grunt once the Melbourne inner city property bubble bursts (and make no mistake it will, just go look at Southbank or Docklands to see the ridiculous over development happening).

    Once this happens, people needing to sell in South Yarra will be up against reduced pricing for inner city suburbs. As a ripple effect increases CG, a ripple effect will decrease CG.

    I am also a big believer in land appreciates and a property depreciates. I am also against buying apartments regardless if its only in a block of 12.
     
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  8. JacM

    JacM VIC Buyer's Agent Business Member

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    Location:
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    I agree with @albanga that my preference would be the Maribyrnong option, however it is essential to clearly understand what the overall objectives are and thus whether either of these properties will help take you closer to that goal.
     
    albanga likes this.