VIC New/old and CG/CF in Melbourne's west

Hi guys, I was a regular lurker over on the SS forums (primarily since I was and still am learning the ropes) and posted only a little. With the small intro out of the way, here's my situation and related questions.

I'm ready to buy my first IP in the western/south-western burbs in Melbourne. Primarily been looking at Sunshine/Ardeer/Laverton areas only, though Sunshine's probably over budget now. Kind of leaves me looking at Laverton only as I'm unsure about Ardeer as it's too close to Laverton North's industrial area (for my liking at least). My budget is $350-$420k tops. I have narrowed it down to 3 properties in Laverton, large blocks and an 'okay' house on them. My intention is to hold for 2-3 years, knock it down and build 2-3 townhouses on it (I know subdivision plans cost a lot of coin). I'm after decent CG and 'hoping' Laverton will start moving north like its neighbours in Altona Meadows/Williams Landing etc. From what I've seen Laverton's achieved a rental yield of about 4%, not the greatest but it is what it is.

I'll sell 1-2 of the townhouses and hold the other(s) - this can change, nothing's set in stone.

So, for my questions now please:

- Obviously, I'd like some cash flow, and little to no hassle first IP, is this a good ploy? Or should I be looking at a newer house since there wont likely be much maintenance (this will limit CG I believe). I'll ensure I get a pest + building inspection before I sign on the dotted line.

- Newer houses in Laverton are much newer, no more than a few years old and they are mostly townhouses again with lower CG possibilities than if I were to knock an old house down and rebuild. So which way should I go - newer or older?

- what are your thoughts about Laverton in general?

Thanks in advance!

 

If buying in laverton don't buy a town house. Look for something old on a big parcel of land, at least 600sqm.

Also close to the train station.

There's a corner block on bladin st up for sale. That would be a good buy.

 

Where are you little tee? We need to continue our debate "laverton vs Ardeer/ sunshine west"

 

I'll continue the debate of Ardeer vs Laveton. Ardeer has a train station near by and in the near future the Ardeer station will be on a metro line. Ardeer has great potential.

 

Laverton has 2 train stations, very easy freeway access, and a much better council than brimbank that will spend the dollars to improve the area.

I'm not knocking Ardeer or sunshine west and I think there's potential to make money.

Both suburbs are very similar and the profit is in the buying.

 

I am also looking at Laverton for my next project and here are my 2c:

• Everyone (especially RE agents) is aware of the potential of the area viz. large (>600 sqm) and sub-divisible blocks and proximity to station and CBD. Hence, most of the blocks on market include council approved plans and the associated premium. E.g. a 3 unit approved site would be in the vicinity of 400-450K or roughly 150K per potential dwelling. If you add the cost of construction there is barely 15-20% profit left over after the development is complete based on today's prices of units. This skews the risk/reward ratio towards risk as the interest rates increase over next 2-3 years can easily diminish the property prices in western suburbs by 20%.
• However value can be added by:
  • Finding non-premium blocks wherein subdivision is not factored in prices.
  • Adding a unit or two to the existing approved plans. This will be challenging given the geometry of the blocks (most are trapezoidal variations with nary a square corner) and orientation (diagonal) of most of the existing houses.
    
  • Slightly difficult DAs like combining blocks. Joint venture or like minded neighbor.
    
  • Straight forward battle axe subdivision and sale of existing dwelling rather than multi-unit development. Cost, effort and time involved in demolition and construction of a unit is saved.
    
  • Waiting (my favourite ) for 6-12 months when the APRA regulations and (hopefully) interest rates begin to bite.
  • Others might want to add....or disagree .

Pickle: Ardeer does have a lesser commute compared to laverton to city, but by when is it expected to be on metro line ?

cheers

 

The alp has just announced more train services for ardeer starting yesterday. Considering deer park, melton and a host of future suburbs are on the line it will happen. When no idea.

 

how does Deer Park fit in the picture compared to Laverton or Adeer as it is a bit cheaper to buy

 

I'm here Hodgey lol.

Look in my opinion I think Ardeer has the best growth factor in it because it's attached to Sunshine and we all know how that area has been going lately. Having said that though there's money to be made in Laverton as well especially if you hold long term, they're not making more land closer to the CBD. At the end of the day you take whichever opportunity ticks all your boxes, thats the most important things and a profit doesn't discriminate!

However, if there was say an identical property for development in both suburbs at the exact same price, I'd pick Ardeer over Laverton any day of the week. Both areas would be smart buys though regardless.

Good Luck!

 

In terms of demographics Ardeer is ahead of laverton. That's why laverton is more of a buy and hold prospect. Having said that laverton has come a long way.

Both suburbs are good for making a profit if you buy right. I guess that's with most suburbs.

Now that we agree i have no one to argue with

 

haha no need to meet at Sunshine Station on Friday Night then Hodge lol

 

Sunshine train station was the hangout for the "glengala boys" many years ago. I wonder if they're still around. If only they purchased property rather than picking fights. Would have been very wealthy now.

 

What about Albion? Cheaper than Sunshine but has similar growth prospects.

 

Following this thread closely