One bed apartments

Discussion in 'Investment Strategy' started by miss jogi, 28th Sep, 2017.

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  1. miss jogi

    miss jogi New Member

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    Hi all!!! So we purchased 2 x 1 bed apartments 5 years ago in good areas, however, have not had much if any movement on the prices (we signed up just prior to GFC)...Do we keep or offload and invest in house or land etc....would love to hear any feedback of anyone in the same situation with apartments...one is in a 125 unit block...the other a 16 unit block. Thanks!!
     
  2. Sackie

    Sackie Well-Known Member

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    If you don't see any potential for CG coming and you can reinvest the funds into a deal where you are a lot more likely to make money then I would most likely off load both, especially the 125 unit block killer. Personally I always stay away from 1 bedroom units. Even if there is some demand for them at the time, generally I find the long term demand and CG for 1 bedders is notoriously not great.
     
  3. Casteller

    Casteller Well-Known Member

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    Hang in there, best two property investments I ever made were both 1 bed apartments (Sydney and London), plenty of demand and much lower ongoing costs than the houses I´ve owned.
     
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  4. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    Where did you purchase? As already mentioned, if you do not see any potential, it is worthwhile considering the opportunity cost of having your borrowing capacity tied up, with an investment which is not going anywhere.

    What is the supply like in the area? Is there a number of units being developed in the surrounds? If so, increased supply may mean no growth for a long time to come. 125 units is a very large complex - must have high strata too?

    What is the rental return like? This will also be impacted if there is more supply coming on the market.

    Talk to a broker to figure out how much you can borrow now, and whether selling and redeploying the funds also adds to your serviceability. Better to have quality assets in your portfolio which will help you grow your wealth over the long term.
     
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  5. Anthony Brew

    Anthony Brew Well-Known Member

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    Not all 1bd apartments are equal.

    1. Were they in blocks of around a dozen or less, or in blocks of 100+ like one of them that OP mentioned ?

    2. Sydney/London are location specific where population is packed in like sardines so there are already a ton of apartments, so supply is much more limited along with the demand being extremely high. Can not compare this to Brisbane, and Melbourne is somewhere in between.

    Once these things are considered "hanging in there" might turn out to be advice for an entirely different 1bd apartment that OP may not realise.
     
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  6. datto

    datto Well-Known Member

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    Wow, 10 years and no capital growth. What's wrong with Vic, apart from the beer, weather and that ball game lol?

    My one bedda more than doubled in that period. And it was full of crack, rundown with high strata levies. It got snapped upI
     
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  7. eletronic_exp0430

    eletronic_exp0430 Well-Known Member

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    1 bedders in Melb must suck big time. My 1 bedder in Sydney more than doubled in value and its positive cash flow my a huge amount.
     
  8. MTR

    MTR Well-Known Member

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    Is it Melb???
     
  9. Gockie

    Gockie Life is good ☺️ Premium Member

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    I'm very happy with my Sydney one :)
     
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  10. Casteller

    Casteller Well-Known Member

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    Yes they are not all equal, but I would not dismiss 1br like some do, they have worked well for me. My one beds have been in a small complex (6 in Sydney Coogee), and larger (98 in London, about 60 in Barcelona). I like the higher returns and lower costs of smaller apartments. Yes in some areas land area may be more valuable but houses cost a lot in upkeep (I have owned 3 houses, the 1 bed flats have been better overall). And not sure 5 years is a long enough period to hold and judge the merit of the investment... things I´ve sold I have held at least 8 years, the Sydney one 18.
     
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  11. ashish1137

    ashish1137 Well-Known Member

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    I dont think 1 bedders are worth in a market like Melbourne. I have read a lot of reviews from people buying apartments in docklands in 2011 and yet to see significant gains, I think it is better to sell and buy some blocks in outer Melbourne.
    You still might see some growth if you are lucky.
    but the apartments might be good for cashflow, even though they would not have given you growth. Maybe you can sell one and invest in a house in out skirts.


    Regards
     
  12. The Y-man

    The Y-man Moderator Staff Member

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    It's all in the timing, not "time in" as we have discovered, but yes also on the type and size of dev.

    Prahran 60's build 40+ in block: bought ~2001 $150k, bank val 2005 $350k, bank val 2013 $320k
    North Melb 90's build 40+ in block: bought ~2002 $180k, attempted sale 2007 no buyers withdrawn, attempted sale 2009 no buyers withdrawn, 2016 sold $380k

    The Y-man
     
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  13. Iamnumber5

    Iamnumber5 Well-Known Member

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    What's the yield like for apartments around CBD?
     
  14. ashish1137

    ashish1137 Well-Known Member

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    Can't say without digging more. However, should be 6-6.5%.


    Regards
     
  15. ashish1137

    ashish1137 Well-Known Member

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    Please read it as "not worth" in first line.
     
  16. Iamnumber5

    Iamnumber5 Well-Known Member

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    I also don't follow CBD apartment market, but if it's 6-6.5% return, then I don't see an oversupply of apartments despite what the news says.

    Anyone can confirm the yield of CBD apartments?
     
  17. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    That would surprise me greatly. I would have thought Melb CBD apartment yield was around 3%
     
  18. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    A an example I think much of docklands stock is at similar prices than 10 plus years ago ?

    Ta

    Rolf
     
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  19. The Y-man

    The Y-man Moderator Staff Member

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    @Iamnumber5

    We get 280pw week for a $320k apartment in Prahran.
    The one we sold in North Melb for $380k was getting $360pw

    The Y-man
     
  20. The Y-man

    The Y-man Moderator Staff Member

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    Probably true, but a massive "price crash" hasn't really happened either.....

    The Y-man
     
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