Mt Atkinson Victoria - new land release 6 Feb 2021 - Good option?

I am new to IP. I am looking at new release which just came out for Mt Atkinson in Victoria West. I am trying to understand if at following prices it could be a good purchase for now & build later. Also I am trying to understand what does "Double storey covenant" means and is it a good thing. I am looking to hold it for 3-5 years and sell for capital gain. Any inputs are welcome.
Land prices examples:
350m2 (12.5X28 - Regular block)- $341k
312m2 (12.5X25 - regular block) - $269k

 

Double storey covenant means you need to build a double storey dwelling on the block.

What size house are you looking at building? Actually, what sort of houses are already on the rental market? Speak with the local PMs in the area to find out what sort of product and config is most in demand.

Assuming you go with the smaller block, $269k plus stamps plus let's say $230k house on top is approx $510k or thereabouts. What sorta rent would the property achieve? You'd be negative a fair bit, will you be comfortable holding it?

Also, when does the block title?

I'm glad you're on the forum and researching. IMO, it's late for Mt Atkinson. They've been flogging blocks by saying the train station will be built soon. It's a long term plan, according to the Western Growth Corridor Plan, read here. Prices for blocks have this "proposed" station included already.

Finally, I think it'll be a slow burn for these areas. When the immigration tap is turned on full flow, there'll be some gains but then again a rising tide raises all boats.

 

Thanks a lot for sharing the info. Its very helpful.

I am mainly looking at a property for which I don't need to pay from my pocket after paying 20-30% initially. After that property should grow in terms of capital gain. If after paying 20% property can sustain on rental yield, I can hold it for long (may be 10 years) for capital gain.

Again, thanks for your insight and pointers. I am expecting to have a 3BR on small lot with rent upto $350pw or 4BR on 350m2 block with expected rent to be $400pw.

This one ranges from Dec 2021 (11 mnths from now) to Aug 2022. Depends on the block.

Thanks for sharing the link. It's very insightful. When do you think, station would land approx. Also where do you think we should look for now?

 

I can only guess the train station is at least 10 years away. But who knows.. I reckon they'd build another one on the WV line sooner, just based on the massive explosion in builds there. Again, I don't know, only surmising.

Say you paid 20% out of at least $510k, your loan would be $400k or so. Repayments say $1600/month x 12 months = $19,200? $350/week x 48 weeks/year = $16,800. Negative by about $3000 plus mgmt fees, rates etc. Positive overall at tax time due to good depreciation. << Plug your own exact numbers for accuracy.

 

After 3-5 years, you may not get any capital gain. This period is relatively small. Holding long-term means long-term

 

Hi Ashjan, if you are looking at $261-241k for land sizes of 312-350m2, you may consider somewhere between Werribee & Mt Atkinson--- that is, I'd highly recommend Manor Lakes Estate. I bought a 10-year-old house there [stone's throw from Wyndham Vale station] in mid 2015 for $330k. Now valued at $550k. Rent is $365/week. I believe properties within this estate would continue to increase for many more years. Manor Lakes estate has a good long term master plan, is well developed with good infrastructure & amenities, is well managed, and the community spirit is strong. I have had good tenant profiles, and people who had lived there want to purchase their home there. Personally, I am checking out available new lands for build. At whatever price point it is right now, my crystal ball tells me that there is still room for significant capital growth within the next 5-10 years

 

Manor Lakes is and would be a good suburb. The only thing is you bought a house for 350K and having 350 a week of rent now is a good return. Now at Minor Lakes a piece of land plus a house would be 550K, whereas rent would still be 350-380 a week or so. So, the return is different.
The second consideration is related to competition. If I go to realestate and select houses for rent at Manor Lakes, I get 30 plus new houses. This means lots of investors are looking for tenants with lots of new houses. So, when a house is a stone away from a train station, that’s one thing. However, a new house for rent would compete against dozens of new houses and that might be a different story. While you can easily drop rent to 330 a week, considering your original financial effort, people who built for 550K can’t do so.

 

yeah. Rental yield would be different for the cases of $330k previous purchase vs $550k current build.
However, if I were to pay the same price for land at Mt Atkinson versus Manor Lake, the choice is obvious. One is a relatively unchartered territory with a long way to go. The other is an established region with many more ways to go

 

Many broken crystal balls keep predicting growth.

Have you seen the supply in these suburbs?
Cashflow doesn't works anymore.
Long term growth might be there but short term, I dont think so. You might be waiting for a while, leave alone 5 years....

Days on market is increasing back again. My broken crystal ball predicts a cool down now.

There are many markets in Victoria where money can stil be made but i would rather turn to sa or wa to make money.
Gone are those days when you could hold land and land would significantly increase in price. Tighter areas may still grow, these areas, so much supply, capital growth might be away for a while....

Cheers

 

Australia is huge with fragmented growth opportunities in every state. OP had mentioned about Werribee in another thread, and now about Mt Atkinson in this thread, to which I had assumed that these are OP's areas of interest. I happened to have IPs in this region, which was why I had walked the talk.

 

What made you think this area will have capital gain?