Melbourne CBD studio

Discussion in 'What to buy' started by geeza, 25th Jan, 2020.

Join Australia's most dynamic and respected property investment community
  1. geeza

    geeza Well-Known Member

    Joined:
    12th Jan, 2020
    Posts:
    51
    Location:
    Penrith
    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.
     
  2. PurpleTurtle

    PurpleTurtle Well-Known Member

    Joined:
    10th Jan, 2016
    Posts:
    113
    Location:
    Melbourne
    Nope.

    But someone smarter than me will give you a more substantial answer.
     
    geeza likes this.
  3. Shogun

    Shogun Well-Known Member

    Joined:
    26th May, 2018
    Posts:
    1,259
    Location:
    Perth
    $ 30k you lose a third to half of that cashing out and selling.
     
    geeza likes this.
  4. geeza

    geeza Well-Known Member

    Joined:
    12th Jan, 2020
    Posts:
    51
    Location:
    Penrith
    Agreed. Great cash generator for a few years but doubt it’d grow enough to warrant a decent ‘growth’ investment
     
  5. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    20,323
    Location:
    Sydney or NSW or Australia
    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.
     
    geeza likes this.
  6. Codie

    Codie Well-Known Member

    Joined:
    6th Mar, 2018
    Posts:
    1,391
    Location:
    Brisbane
    Extremely limited growth, there's no demand. There's a reason why the yield looks good, because its at the expensive of growth.
     
  7. Omnidragon

    Omnidragon Well-Known Member

    Joined:
    17th Oct, 2015
    Posts:
    1,693
    Location:
    Victoria
    That’s a horrible return
     
  8. Wendy Chamberlain

    Wendy Chamberlain Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    96
    Location:
    Melbourne
    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.
     
    lightbringer and geeza like this.
  9. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    6,010
    Location:
    Australia
    this is a useless number unless you also state how much the thing cost 5 years ago.
     
    The Y-man likes this.