Melbourne CBD studio

Hi guys,

After some advice re studios in CBD. Currently looking at a studio in the heart of Melbourne. Yield is great and great cash flow. What are the CG like for studios? Is there growth to be expected for studios? Some I’ve looked at have grown $30k in 5 years etc.

 

Nope.

But someone smarter than me will give you a more substantial answer.

 

$ 30k you lose a third to half of that cashing out and selling.

 

Agreed. Great cash generator for a few years but doubt it’d grow enough to warrant a decent ‘growth’ investment

 

Don't just look at the headline rate of return - you need to consider all aspects: vacancy period, vacancy rates, frequency of turnover of tenant, occupancy costs (rates, water, strata costs) etc.

Studio living in the CBD is short term so there is a higher turnover of tenants and more cost to you.

Finance is also more difficult.

 

Extremely limited growth, there's no demand. There's a reason why the yield looks good, because its at the expensive of growth.

 

That’s a horrible return

 

Agreed. They're not considered by many to be a good investment, so you are limiting your buyer pool from day dot, when the time comes and you decide to sell it.

 

this is a useless number unless you also state how much the thing cost 5 years ago.