Newbie to forum, looking for 1st IP

Discussion in 'Introductions' started by Vaib, 15th Feb, 2019.

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  1. Vaib

    Vaib New Member

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    Greetings to all, I have been reading a lots of post in this forum, which have been really knowledgable and helpful to me. I own principle home in Melbourne-Clyde north, and I reckon it’s time that I’m prepared for my first investment property. I’m confused about three options so need some suggestions. It’s more about first timer anxiety. 1. Buy cheap apartment in Melbourne CBD around 200k-300k which hotels lease from you with high rental yeilds. Option 2- buy a house in Adelaide some 10-15km from city at price range of 400k. Option 3- buy in weribee/hoopers crossing around 500k. I will be holding them for long term. Any suggestions or guidance would be appreciated.
     
  2. The Y-man

    The Y-man Moderator Staff Member

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    Welcome.

    1. Not for the beginner - and usually very low liquidity (that's why they are cheap as people are desperate to offload, and you won't be able to get much of a loan for many of them. It's a commercial property, and IMHO better to buy a bigger lump of properties (multiple buildings) through REITs (search on site for REIT and property trusts.

    Will leave 2 and 3 for others better suited to answer these :)

    The Y-man
     
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  3. Vaib

    Vaib New Member

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    Y Man thanks for time and input :) appreciate it
     
  4. The Y-man

    The Y-man Moderator Staff Member

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    Westie and albanga like this.
  5. Propertunity

    Propertunity Well-Known Member

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    I second this. Not 1.
     
  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Option 1 has demonstrated finance risk, and demonstrated poor capital rtn in most cases.

    can be an ok Investment for an SMSF or a retiree that can invest the cash, since the actual $ returns are usually not bad, but this isnt an asset that a newbie should be looking at usually

    ta

    rolf
     
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  7. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    Agree, not 1.

    Before you pull the trigger on 2 or 3, have you planned out a bit of a strategy with your broker? What are you hoping to achieve with this purchase? Are you looking to build a portfolio, or just buy one and leave it at that?

    The answers to these questions will help clarify the kind of properties you should be looking at. :)
     
  8. Eric Wu

    Eric Wu Well-Known Member Business Member

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    Option 1 , no no :oops::oops:
     
  9. albanga

    albanga Well-Known Member

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    Computer says NO to number 1.

    For number 3 if your strategy is long term buy and hold then I think you will do well. As I have said in many posts, I still think the Melbourne market has some cooling so I would probably sit on the sidelines for another 6 months.

    TBH though I’m much more keen on the West/North West corridor than Weribee/HC. Their is just so much land for further development and I think that will suppress house prices for some time. The exception to that will be closer to the city center which will naturally benefit from the development = more people = more business. But the cost of entry their is way outside your budget.

    If you put your attention instead to Sunshine/St.Albans and up further to Broadmeadows you will see these areas are land locked. Gentrification has begun and they have significantly more infrastructure and established key drivers like transport, schools, hospitals .etc
    Both Weribee and Sunshine are are set to be pillar commercial areas of the West but due to proximity to the airport and CBD plus the Airport Rail which will connect through Sunshine then I reckon it will dominate in terms of development.
    Get yourself something their with land and in 20 years $$$
     
  10. Vaib

    Vaib New Member

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    Really appreciate everyone for your guidance and suggestions. @albanga - will certainly divert my research towards North west suburbs. Broadmeadows and St. Albans seems more budget friendly then sunshine.
     
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  11. Westie

    Westie Well-Known Member

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  12. KateAshmor

    KateAshmor Victorian Conveyancing Lawyer Business Member

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    Welcome @Vaib :D Our clients are staying away from 1., can’t comment on 2 (we’re Vic only) and 3. beware poor quality properties that need significant capital works (unless you’re ok with that).