VIC Melbourne choice under 500k

I am about to buy my second porperty to sell in 12 months.
What would be the best choice out of these Sub 500k suburbs?

1. Werribee : 385k ---> 455K ---> ?
2. Melton South : 289k ---> 365k ---> ?
3. Cranbourne : 414k ---> 490k ---> ?
4. Cranbourne West : 410k ---> 505k ---> ?
5. Pakenham : 400k ---> 470k ---> ?
6. Franston North : 360k ---> 455k ---> ?
7. Hampton park : 415k ---> 490k ---> ?
8. Craigieburn : 416k ---> 500k ---> ?
9. Sunbury : 405k ---> 480k ---> ?
10. Hoppers crossing : 420k ---> 501k ---?

 

Makes it difficult to make a profit in 12 months with property due to the high buy/sell costs.

Even at 500k the stamp duty & fees is $26.5k then when you come to sell you will need to pay 2% + GST along with marketing (5k) most likely so even with a 10% growth (550k sale price) your walk away profit if the property was neutral is $6,500 or after tax about 4k.

If you want to go to all that effort for 4k be my guess, however that is a lot of risk and you are banking on 10% growth. If you get more yes that is great but if you got less than 10% growth you pretty much lost money.

If the property was negatively geared then good luck making any money.

To me none of those suburbs I would choose to make money in 12 months - go regional or mining towns and pray for boom... Personally for 12 months I would only consider shares as the buy/sell cost is far far cheaper (for 500k buy/sell is about 5k each side or 10k - less tax).

 

pls recommend a blog site for learning how share business work

 

Sorry but I completely disagree.
If anyone thinks of it that way, he/she shouldn't worry about property investment.
What I want to find out is which suburb out of 10 above will have another 20~25% growth by the end of 2018. They all could go down or one could have another 20% growth which is another 100k.
I dont worry about anyone laughing at this at all. If I put this exactly 12 months earlier with those 10 suburbs for 20% growth (100k), I am sure that not even one person would take it seriously.. well all of them turned out to be wrong.
In those suburbs, check all the houses sold within 12 months for the last 18 months.
The sale price differences are between 70k~175k. Well someone made a lot from investing 360k without doing anything within 12 months. Winner!

What I can do now is
Do nothing - making $0
Take a chance when I can - potential of making $50000+

Can anyone tell me with 100% confidence none of those suburbs median price will be
100k up in December/2018? I am sure absolutely NO ONE.

 

One more thing.
If you want to buy one to sell in 12 month time.
You should buy one 20~30k cheaper and sell it 20k more than the market value to cover all the costs.
How is it possible? Always possible.
I have done it 4 times in Aus and Korea and lots of people are doing it everyday.
No matter what, bargains are out there, always.

 

Agree with your post, but you are ignoring the risk side of the equation completely.

You should change it to

What I can do now is
Do nothing - making $0 lose $0
Take a chance when I can - potential of making $50000+ or potentially lose $50000+.

Can anyone tell me with 100% confidence those suburbs median price will stop moving and go sideways for 5 years? I am sure absolutely NO ONE.​

Melbourne has gone up a LOT. It will stop going up at some point, and the more ridiculous the prices, the closer to that point where it will stop going up as these affordable locations become unaffordable. You are gambling on the suburbs that are affordable still going up, and it may happen, but it also may be close to or at the point where it stops and you get caught with your pants down and lose your cost of buying & selling (5+3%?) as well as possible losses while while prices correct as well as losses in terms of negative cash flow while holding since even these locations are negative cash flow.

Sure you can do nothing now and make no gain.
You can also do something now and end up with a loss. Even if the price does not go down and just stays still for a few years, you have lost 8% in buying and selling costs, and a lot more if you hold it due to negative cash flow.

Not saying your idea is wrong - but ignoring the risk doesn't make it go away. It just gives you a lot of unexpected pain if it eventuates. You may know only people who made money and not know people who have suffered through this, but they do exist and they do suffer from it. Whatever you do, be careful.

And by the way, people suggesting it is risky are not trying to have fight with you. They are trying to show you the dangers and the risk so that you can make a more educated decision. If you SHOUT BY CAPITALISING YOUR TEXT, people will just not bother and you will make sure the only people that respond are the people who agree with you - in which case, what is the point of asking peoples opinions - just to demonstrate confirmation bias?

 

Ok so i dont really think what you are trying to do is a great idea but i would have a look down at phillip island
Its really only been going up for aboit 9 months whereas all the other melbourne locations you suggested have been going up for close on 2 years

 

Why is it that people come on here with an attitude that they know it all, but yet ask other random strangers for advice??

Not just this thread, but many others that could be 99% addressed with a basic RE.com search and a bit of groundwork?? Strange behaviour, but it seems to be happening more often.

 

Thanks for the kind advice
First of all, my comment was the reply to Big Will, not to everyone.
I simply didn't agree to his last comments. Maybe the way I responded was inappropriate.
Sorry but English is not my language.
Also, I said all those suburbs could go down.
So of course there is a risk I didn't have to mention.
That is why I said, I can take a chance (which means I can lose money)
I didn't say I have to sell the second property in 12 month time.
I meant I am looking for a property I can buy now and sell in 12 month time if it gains 20% growth. If it is not worth selling it (flat/down/just 10% growth), why would I sell it???
I can happily hold it another 10 years till the next cycle.
Why do people assume that I have to sell it in 12 month?
My point was depending on where I buy, there could be a case either I can sell it with 20% growth in a year or I have to hold it forever. And I strongly believe of those 10 suburbs, some will get that 20% growth by the end of next year. Some could lose, you never know.
Someone didn't have to tell me straight away it is just not a good idea saying all those suburbs are not worth buying (even if it has proven it was a gold mine this year, well.. people see what they want to see and hear what they want to hear when they have no idea about what is really going on) and put my money in the share. That was not appropriate either as a reply here.

 

I don't think the period of growth is important. I was just curious if any of these suburbs will eventually hit that 600k median mark with first home buyers activity. If so, which one has the biggest potential, that was my question.

 

Lol.

Property investment is a long term game.

Property is an illiquid asset with significant entry and exit costs.

There is risk associated with Property investsment.

Property growth moves in distinct cycles. Melbourne is towards the end of a very big growth cycle.

No one has a crystal ball.

You came on here asking for advice, were given some very sound advice , didn't like the answer and went off on a rant.

Dumbest post of the year.

 

Because when you first come to this forum, you have a billion pages of internet with most of them filled with rubbish from sales people and spruikers, and you have to be extremely critical to avoid following bad advice. People lose tons of money following bad advice about investing.

When someone finally arrives on here, they bring their highly critical attitude which was needed previously. Think of being in a dark room full of people who have infra-red glasses and can see where you are and take pokes at you and all you can do is try and swing around defending in every position because you have no other way.

Unfortunately that attitude hinders your learning once you actually find somewhere that the information is mostly good like this forum.
Once they have been reading on here for a while, and have been given advice on some of the quality books to read about the property cycle and property investing, it opens their understanding as to how it works from a nuts and bolts perspective as well as a big picture perspective and it all fits into place.

Until then you have no way of knowing what information is safe to follow and what is b.s. so that highly defensive attitude that was needed previously will continue to be a hindrance.

At least, this was my experience when I first got here.
People would say it is risky to buy now, without explaining why it was risky. They would mention the property cycle, without me knowing where to learn about it. I don't know if you noticed, but most comments are a couple of lines long with no explanation leaving a newbie confused and unconvinced. So without a more in-depth explanation (from some great books), I either accept comments without reasoning (which isn't too smart) or remain highly sceptical and come off as not willing to believe anyone's comments.

 

Stamp duty is a killer in Melb, take this and CGT versus risk???? Are we close to peak??? Ask yourself do you feel lucky?

 

There were a few errors which I fixed for you.

Edit: I'm sure some of these will go up, but who can say which or by how much? All I know is that the list looks like a who's who of bogantown Melbourne...

 

We will see about that.
With all those cycle and graph crap since 2015, I had to spend 300k more to buy a house in Melbourne. End of a very big growth? It will come in 3~4 years. I will be here at the end of the next year. We talk again.

 

Thanks
I simply picked the suburbs under 500k median price.
Just in case any of them hit the 600k mark with first home buyers rush next year.
Of course they are the poorest suburbs.
I am not interested in suburbs over 700k in Melbourne at all at the moment.
Not interested in the bomb.

 

Because in the first sentence of your first post YOU said,

"I am about to buy my second porperty (sic) to sell in 12 months."

People can only respond to what you say.
Marg

 

I really don't understand all the responses here.
What are you getting at?
People shouldn't buy any house because it is the end of the cycle? For how long?
At this point, buying a 1M overvalued house in the middle ring or less than 500k affordable house, which is less riskier? which is smarter? which has more potential for the next a couple of years. If it doesn't go up 20% in a year, I can hold it for 10~20 years until I get 20% capital growth. Why should I feel lucky for that?

 

Thanks Marg
Yes I should have added "if I hit the jackpot within 12 months"
Sorry, language barrier.
I still believe some of those suburbs will hit 600k median mark next year while some suburbs lose 1m median suburb title in Melbourne.

 

Probably because they've been around for years.