Melbourne now: town house or small block with house

Discussion in 'What to buy' started by OTmg, 29th Mar, 2017.

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  1. OTmg

    OTmg Well-Known Member

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    Hi all,

    As you guessed, I am not sure whether to go with a town house or a house with a small block. This is for 35k within Melbourne CBD. Block size I may consider is between 250-380, or really as big as possible for a 490k budget. Otherwise it'll probably be a town house. The most important aspect is to make sure of a minimum 3.9% ry.

    Thanks in advance for the comments.
     
    OTmg, 29th Mar, 2017
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  2. OTmg

    OTmg Well-Known Member

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    Any comments? given the quick rise in prices in Melbourne, we need to make a choice soon!!! :)
     
    OTmg, 30th Mar, 2017
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  3. The Y-man

    The Y-man Moderator Staff Member

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    Your question may have confused people! :) Is that a unit for $35k in the CBD?

    The Y-man
     
    The Y-man, 30th Mar, 2017
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  4. Oliver

    Oliver Well-Known Member

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    I'm pretty sure he was talking about distance 35km from Melbourne
     
    Oliver, 30th Mar, 2017
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  5. The Y-man

    The Y-man Moderator Staff Member

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    This is a really difficult one to answer - there is a lot of factors involved.
    My answer is "it depends on the suburb".


    The Y-man
     
    The Y-man, 30th Mar, 2017
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  6. thatbum

    thatbum Well-Known Member

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    I don't know melbourne that well, but my comment would be that you should never feel pressured into buying quickly because of the perceived need to jump in on a rising market.
     
    thatbum, 30th Mar, 2017
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  7. OTmg

    OTmg Well-Known Member

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    Sorry, It's 35km from CBD, I think the issue is more with ry. So we need to get something of about 4%, which these days will compromise the CG.
     
    OTmg, 30th Mar, 2017
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  8. The Y-man

    The Y-man Moderator Staff Member

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    Not really - you can get a house on 440sqm that yields almost 4% pa gross rent 7km from the CBD in a strong CG area. The issue for you is in fact the price bracket.

    4 Moreland Road, Essendon, Vic 3040 - Property Details

    The Y-man
     
    Last edited: 30th Mar, 2017
    The Y-man, 30th Mar, 2017
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  9. Anthony Brew

    Anthony Brew Well-Known Member

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    Why is that the case by the way?
    Isn't it generally the other way around - cheaper places offer a higher yield?
    Also, I though that area has boomed already. For example in Pasco Value for 500k-ish is offering about 2-2.5% yield. Why would a house one suburb in offer double the yield?
     
    Anthony Brew, 30th Mar, 2017
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  10. OTmg

    OTmg Well-Known Member

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    Ah yes you're right the small budget and rental yield is a tough nut to crack unless we go to suburbs that have worse reputation. I'm happy to go with 'dodgy' suburbs. As long as we get PM that have a great reputation.
     
    OTmg, 30th Mar, 2017
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  11. The Y-man

    The Y-man Moderator Staff Member

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    This is because the property market is not an efficient one like the share market - there is always some oddity happening.

    I think one cause is the current "I'm looking for development potential" has sent hopefuls looking for 600sqm blocks, driving the prices up in the mid-ring subs. On the other hand, the small block inner city subs like Ascot Vale, Aberfeldie, Moonee Ponds, Essendon and even places like Prahran occasionally throw up a relative "bargain" because no one is interested in that market. The rent is also quite high due to the convenience factor, and given 3~4 BR can be shared out between that many tenants.

    There is also a school zone in the area at play too (strathmore)

    The Y-man
     
    Last edited: 30th Mar, 2017
    The Y-man, 30th Mar, 2017
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  12. KateAshmor

    KateAshmor Victorian Conveyancing Lawyer Business Member

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    Many 'dodgy' suburbs are rapidly gentrifying and undesirable tenants are being pushed out.
     
    KateAshmor, 31st Mar, 2017
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  13. Realist35

    Realist35 Well-Known Member

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    Hi Kate,

    Would you be able to share some of these suburbs, especially if they have a decent rental yield?
     
    Realist35, 31st Mar, 2017
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  14. KateAshmor

    KateAshmor Victorian Conveyancing Lawyer Business Member

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    What I can share are the suburbs my investor clients are currently buying into. They include Noble Park, Frankston North, Croydon, Heidelberg, Reservoir, Ringwood East, Doveton, Hadfield, Dallas, Sunshine, Mernda, Barwon Heads, Corio and Newcomb.
     
    KateAshmor, 31st Mar, 2017
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  15. Redwood

    Redwood Well-Known Member

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    Hi there

    Sorry if I missed this - is his to live in or purely investment. This is important as many "growing" suburbs have a "stigma" much like Fottscray many years ago - which many associated with Spring Rolls and needle pushers - which is now "hipster" central. For an investment, look at Braybrook - 12 km to the city - ticks all the boxes. We just settled on 3br townhouses for $490k a pop. The same townhouses will fetch close to $600k in Noble Park.... importantly these suburbs are "revitalising" you may not want to live there, but you will get an awesome capital return and rental above 4% easy.....You can get a good townhouse in noble park - 2beds - close to the station and show for $400-450k depending on how many in the development.

    Owner occupier is different....

    Cheers Ivan
     
    Redwood, 31st Mar, 2017
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