VIC Melton area for 400-450k investment property

I have been looking at Melton/Melton South area too, and it seems 400-450k can get you a good block with 600sqm land. Even though the price seems to have grown quite a bit in the last 2-3 years, if you look at the Melton council website and abs.gov.au, the prediction for population growth in the next 10-15 years will be double of what is it today? That would help increase the demand of housing and push price up wouldn't it? I haven't been able to check out that area yet personally, but it seems there are some good stocks in the market atm. My only concern is the rental yield and also maybe quality of tenants you will get/.

 

It really depends on your strategy. Are you looking for capital growth in the short term to leverage the equity into another purchase? If so growth is more important than cash flow, as long as you can afford the hold cost. You also need to be careful about getting too caught up in rental yield. You should do you numbers on cashflow in my opinion. Holding costs such as council and water rates, insurance and loan interest rates plus property management fees 8.8% in WA as opposed to 5.5% in some eastern states all make a big difference to your cashflow regardless of your gross rental yield figure.

 

I think you are right you can still get something for that price in the residential growth zone. Was over there today and it’s busy. Lots of people at home opens and bidding at auctions. This place sold for $466K

12 Brennan Street, Melton South, Vic 3338 - Property Details

Wouldnt worry too much about quality of tenants, that’s your PMs job to manage.

After only reading about the place before my visit I was pleasantly surprised.

 

Which are the changes in depreciation you are referring to in context of your purchase in Melton?

 

There are 3 stations in 10 min drive.
Marshall is one for instance.

 

How about this place
8 ARAWATA PARADE Melton Vic 3337 - House for Sale #127568502 - realestate.com.au
Melton stil has a lot of go left in the tank

 

Referring to this change
How changes to depreciation will affect investors

It doesnt affect my existing property (purchased 2007). I was meaning in the context of buying a 10 yr old house for example and getting a depn schdule done. Using depn return on tax to bridge gap of rent vs holding costs. Cant do it now after the change.
Changed my strategy on my recent purchase in QLD where i went for something that needed $$ throwing at it rather than spend $30k more purchase price with it already done. So i will get depn on painting and carpet etc as i have paid after settlement vs having someone do it prior to selling(hope that makes sense)
When i bought the partioular house i still hold in Melton, it was negatively geared but effectively cash flow neutral due to $6K in depn pa and me being in the top tax bracket. $3K back from non cash deductions made it cash flow neutral from the start.
Melton was a good market to pick up houses like this - lots of recently built stock where this strategy WAS a viable one for the area.