Next Door

Discussion in 'Investment Strategy' started by mytwocents, 19th Aug, 2019.

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  1. mytwocents

    mytwocents Well-Known Member

    Joined:
    9th Jul, 2018
    Posts:
    55
    Location:
    Melbourne
    Hey Investors,

    I have been pondering over a decision I could possibly make in regards to my next step of investing.

    I am currently paying off my PPR with a LVR of 64%. I want to get an investment property and now that I have some equity (purchased at 400K, valued at 620K), I am very hesitant in what path I should go down. It is like the the pressure of coming out with a 'second album' when you have laid a good foundation for your first.... you don't want to stuff it up.

    Options

    1.) Investing in a two bedroom apartment inner-city (Collingwood) where it would possibly become unattainable in next five years as more quality apartments are built in this area and prices increase. It has the 'pink economy' and I believe has a great 'place economy' for renters in the future years for Melbourne, meaning a positively geared investment.

    2.) Buy house and land package in the West / North-West where both population density is occurring and infrastructure. I will most likely obtain some Capital Growth within next ten year cycle. The only problem with this strategy is that I will not be able to purchase closer into the city as I will most likely we priced out.

    3.) This next option could present itself if i negotiate with the seller. My current PPR is 580m2 and my next door neighbour has plans to sell his 600m2 property for around 560K in the Gladstone Park area (both have a freeway behind it). Would it much smarter to buy and rent this property out to perhaps create more strategies (e.g. subdivision or sell the land size to developers) in the future? Am I putting all my eggs in one basket or should I diversify a portfolio?

    I would love some feedback and suggestions on these scenarios.

    Thanks for taking the time to read this.
     
    Rhiannan12 likes this.
  2. Scott No Mates

    Scott No Mates Well-Known Member

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    Sydney or NSW or Australia
    Option 3 - you need to do your due dilligence as to the value this property will have to you compared to other buyers.
    What will it give you? Can a 1200m2 site be developed under the LEP (zoning)? Will it allow you to squeeze an extra unit or more onto the block as compared to developing the block by itself?
    If it can't give rise to more intense development, will it give you the opportunity to put a right of way at the rear of the block to access yours for a granny flat? (and leave space on the existing block for the same?)
     
  3. spludgey

    spludgey Well-Known Member

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    Have a look at zoning for option 3.
    Option 2 is a poor choice, in my opinion!
     
    John_BridgeToBricks likes this.
  4. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    Options 1 and 3 can work. Option 3 is the most promising.
     
  5. BarneyRubble

    BarneyRubble Well-Known Member

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    20th Jun, 2015
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    Location:
    Brisbane
    Notice that everyone that has voted for Option 3 is from Sydney.

    Gladstone Park is an area of aircraft noise. Appreciate that is where you live and can make the best judgement, however, personally I would be seeking alternatives that adding to my portfolio in that area especially if the third runway ever gets the go-ahead.
     
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  6. Rhiannan12

    Rhiannan12 Member

    Joined:
    13th Oct, 2017
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    Location:
    Sydney
    Would that opportunity still make for a good investment if you didn't live next door? Would the larger land size further out be better than buying something smaller and closer in to the city where there's potentially more jobs, higher incomes and greater access to lifestyle factors?
     
  7. WellKnow

    WellKnow Well-Known Member

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    31st Mar, 2017
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    Location:
    Melbourne
    Agree with ^^

    it is good that there has been capital appreciation in the last few years but do you expect Gladston park which is squeezed between Essendon and Tulla airports to continue.

    Why not look at inner east to south east and what is your budget? I was looking in Caufield to Huntingdale along the train line for a older style unit these would outperform Collingwood in terms of CG.
     
  8. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    Location:
    Sydney
    I think that people gravitated towards option 3 because obviously combining blocks gives strategic development opportunities, albeit in an area that may have its shortcomings. Strategic options create options for multiple incomes in a way that alternatives 1 and 2 do not.
     
    mytwocents likes this.