VIC Off the plan apartments?

Anyone had any succeess with them?

I've only heard bad things about them. I've inspected apartments in the cbd selling for 60k less than what the owner paid 5 years ago because the owner bought off the plan.

Ideally buying off the plan would be like paying wholesale price for a house but I'm not sure that's the case. Has anyone bought an off the plan property that was worth 10% more after completion?

 

Plenty of threads on the topic.

It all comes back to doing your due diligence
I have an OTP past due to settle in Sydney, up over 10%, but it is the only development in its leafy suburb, close to station, shops, school and Pub.

Buying anything during a boom can make money
Buying smart is required in a downturn

Docklands in Melb is an example on several fronts, over supply, great marketing (to investors), HYPE and people overpaying, poor design in some cases, very few were boutique/higher end developments, though when the urban sprawl slows it may swing back and recover.

 

Yeah i've had a look and couldn't find any discussions relating to whether OTP was a good investment or specifically people who have made good money from OTP.

 

How's this? Search Results for Query: otp apartments | PropertyChat. From what I've read, you really need a lot of DD to make sure this strategy works for you. Don't fall for the hype. Like @Stoffo said, Docklands is a prime example of how it's a terrible investment. Docklands is ghost town at the best of times. There are still more apartment blocks coming up, there's one exactly opposite the first tram stop that's being built.

 

thanks for the link.

 

I would not buy OTP apartments - I would buy 2nd hand older apartments

I started out refurbishing apartments for sale and rental in Melbourne - (in a market that was relatively flat - no booms) there are still a lot of prime located apartments in Melbourne CBD and fringes. I would stay away from the West Melbourne which borders off the egate. Prime locations as I mentioned would be the ones in the underground train loops that are close to transport. Any right minded person knows the trams are jam packed during certain hours in the day. Also walking distance to CBD and the free tram zone appeals to lots of ppl. that alone is savings in transportation cost per year.

Docklands I would buy in one building same in CBD. - if you're looking to make your gains from short terms leasing airbnb and renting it out - the returns are the highest in the CBD. really depends on your strategy

 

OTP apartments in most cases are horrible investments. I would ask myself if I am considering one then what is my overall goal/strategy?

What makes you want to even consider OTP apartments? Is it for tax concessions? The perceived easiness to rent them out? The potential tenants?

There must be a reason you would even consider them and we know we can discard cashflow (they will be negative), ability to manufacture some gains (you can't renovate or subdivide one). So really your in it for the potential passive growth??

In that case I could probably reel off about 100 better options.

 

OTP is a huge speculators game. If you're the kind of person that bets on a team before the start of a season then OTP might be for you. You're speculating on the market conditions, the quality of the final product, the build time...

We've all seen people make an absolute fortune with a lucky buy so it can work out, kind of like this guy.

 

OTP apartment buys can work well in a very small amount of scenarios and even then, the risk is high-medium to high imo. Personally I would never buy OTP no matter what my strategy or situation is. The risk is not worth the potential rewards in my estimation and there are much better options with lower risk.

 

haha....your avatar, just realised who it is... good one

 

Buy to live is O.K if that's the only thing you can afford in your chosen suburb/area. Capital gain wise not great but depreciation is massive so could benefit if you are on high income.

With the new changes from 1/7/17 with no stamp duty savings for OTP in Melbourne it will be interesting to see if this makes near new apartment prices closer to the new OTP ones (similar quality).

 

A matter of weighing it up, if it is cheaper to rent why buy a property with zip or minimal potential of growth
buy a property with better prospects of growth down the track or continue saving

Interest rates are already on the rise another important consideration and there is already an oversupply of apartments in most capital cities around Australia.

No point buying property if it makes no sense. What you are buying is potentially a lemon.

 

you won't get evicted, nothings beats living in something you own/bank owns (sense of accomplishment, bragging rights etc.). Some people like living in apartments (esp Asians) and if you can find one with unblockable views (e.g. park across the rd) and great location then have a think about it

But agreed 9 out of 10 apartment buys are a bad investment move

 

The only success story I've seen was my client bought an OTP in Kellyville back in late 2015, a 2 bedroom unit for 520k, when I did valuation for him in July this year it came back at 750k .

Rental appraisal has also increased in the valuation report compared to what the selling Gent quoted him.

But I'm still not convinced OTP unit is a good investment, for the same amount I'd rather buy home and land.

 

Been to Perth or Darwin lately?

When the tide goes out OTP apartments are left high and dry.

The owners of these products up here haven't taken a bath.... more like total financial annihilation.

Now this sort of scenario is unlikely in Syd and Melbourne, but what happened in DRW/PER highlights the extra risk you take on when buying an OTP.

OTP can be a winner in booming markets, no doubt about that but for God's sake...don't be the last one in when the tide goes out!