One bedroom units-good investment?

Discussion in 'What to buy' started by Amber83, 21st Oct, 2017.

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  1. Amber83

    Amber83 Well-Known Member

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    I'm looking to buy a one bedroom older style brick in a block of les than twelve in Melbourne-areas looking are Brunswick,thornbury,Fairfield,northcote,Collingwood,north Fitzroy.
    From what I've seen they sell for around $320-390k.
    Has anyone had any experience with one bedroom units in these areas?
    My plan is to live in it for a couple of years as I want to live in these areas but can't afford to do so otherwise,then plan for capital growth long term.the yields seem good,just not sure about long term growth.
    ABS data predicts there will be more people without kids than with them by 2030 and the trend towards single person households is increasing,so I'm thinking there may be a demand in the future for one bedroom units in blue chip suburbs
     
    Amber83, 21st Oct, 2017
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  2. thatbum

    thatbum Well-Known Member

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    Why not just rent in the area you want to live, and invest somewhere else with better growth prospects?

    Otherwise why would you voluntarily invest in something where you're not sure about the growth prospects?
     
    thatbum, 21st Oct, 2017
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  3. The Y-man

    The Y-man Moderator Staff Member

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    @Amber83

    Are we talking "unit" in Melbourne speak (i.e. single level development villa units) or "apartments"?


    The Y-man
     
    The Y-man, 21st Oct, 2017
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  4. Gockie

    Gockie Life is good ☺️ Premium Member

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    Wow, sounds so cheap. In Sydney the same sort of thing wouldn't be less than 600k.
     
    Gockie, 21st Oct, 2017
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  5. Amber83

    Amber83 Well-Known Member

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    There aren't a lot of single development villa units so i guess apartments as the ones for sale tend to be in blocks that are more than one story.but not new apartments.
     
    Amber83, 21st Oct, 2017
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  6. Amber83

    Amber83 Well-Known Member

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    Because I don't like renting.done it for years and it lacks security....owners sell then u have to move,or you get a **** landlord/estate agent who won't fix anything.also,I'm not sure about long term growth here but can you ever be sure about that anywhere? I'm guessing they will go up in value because all other properties (maybe apart from new apartments) go up in those areas so I can't seee how one bedroom older style units won't follow suit...
    All investments are speculative though aren't they
     
    Amber83, 21st Oct, 2017
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  7. Amber83

    Amber83 Well-Known Member

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    Also living In the property means I get the first home buyers stamp duty exception making it a lot easier financially to get into the market...I would have to wait to save potentially another 18 months to save the deposit plus deal with banks that may not want to give me a loan (I already have an IP in nsw that I've never lived in )
     
    Amber83, 21st Oct, 2017
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  8. The Y-man

    The Y-man Moderator Staff Member

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    Righto.......... down to business then :cool:

    I have owned a 1BR apartment in Fairfield and a 2BR in Thornbury.
    CG has been ok long term (doubled over 7 years) ~ and looking at recent sales is still going at that rate.

    The Fairfield apartment suffered quite badly from rising damp - door frame rotted, bathrrom was always damp.

    Thornbury apartment was opposite - clay pan under one half of building dried in drought, and building began to split in 2....:eek:

    Lifestyle in Fairfield is nice - you even get a property chat meeting at the local pub once in a while!

    The Y-man
     
    The Y-man, 21st Oct, 2017
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  9. Amber83

    Amber83 Well-Known Member

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    Because I don't like renting.done it for years and it lacks security....owners sell then u have to move,or you get a **** landlord/estate agent who won't fix anything.also,I'm not sure about long term growth here but can you ever be sure about that anywhere? I'm guessing they will go up in value because all other properties (maybe apart from new apartments) go up in those areas so I can't seee how one bedroom older style units won't follow suit...
    All investments are speculative though aren't they

    Do these units tend to suffer from issues like this often?
     
    Amber83, 21st Oct, 2017
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  10. The Y-man

    The Y-man Moderator Staff Member

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    It's like any brick building - be it house or apartment. The only issue with a apartment is that you need to convince the majority of owners to fork out to repair it (ye olde OC/BC challenge).
    Be on the lookout when you buy. We replaced the rotted bit of timber, and painted over all the water marks so the unit looked beautiful and fresh..... (as you do). So I suggest do not go for anything that has been reno'ed or even freshly painted - filler and paint can hide a million disasters (and a building inspector can't see it without scraping the paint off).

    Having said that, the apartments I sold back post GFC are still standing, and people living in them, so maybe it doesn't matter so much..... o_O

    The Y-man
     
    The Y-man, 21st Oct, 2017
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  11. The Y-man

    The Y-man Moderator Staff Member

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    @Amber83

    Also consider Prahran/StK. East - there's a bit of a glut there.
    I'd love to sell my 1BR but the market is a real buyer's one right now.

    Here's the insane thing.
    The fairfield apartment was smaller than the prahran one (prahran is about 48sqm).

    They were bought about the same time (~2001)
    FFD: $115k
    PRA: $150

    We sold FFD for $220k+ in 2008.
    Someone resold it in 2012 for $305k.

    We would struggle to sell our PRA for $320k today.

    The Y-man
     
    The Y-man, 22nd Oct, 2017
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  12. The Y-man

    The Y-man Moderator Staff Member

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    @Amber83

    While I remember - most of these old blocks are not individually metered. A boon if you want to run a car wash in your car spot, but a pain if you are frugal and you have a building full of tenants who leave their taps on all day.

    The Y-man
     
    The Y-man, 22nd Oct, 2017
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  13. Amber83

    Amber83 Well-Known Member

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    Oh I didn't realise that.so u just have to split your water bills evenly among all the tenants?!how does that work?
    Also from what I've seen there are a lot of apartments that are 45 square metres or below...is it hard to find ones above 50 sq metres in your experience?
     
    Amber83, 22nd Oct, 2017
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  14. The Y-man

    The Y-man Moderator Staff Member

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    Yep! - the water company just does a meter read and splits by the number of units.

    Again - yep.
    50+ is hard to get in 1BR territory, unless it is in a old art deco building or some such.

    The Y-man
     
    The Y-man, 22nd Oct, 2017
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  15. Amber83

    Amber83 Well-Known Member

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    Hmmm...how hard is it getting finance for one bedders below 50 sq metres?do u generally need a 20 per cent deposit?
     
    Amber83, 22nd Oct, 2017
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  16. Amber83

    Amber83 Well-Known Member

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    That's crazy with the water.i didn't realise that...so I'm paying for other people to have super long showers??
     
    Amber83, 22nd Oct, 2017
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  17. The Y-man

    The Y-man Moderator Staff Member

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    Almost 100% certain you will need a 20% deposit - but do talk to your broker.

    The Y-man
     
    The Y-man, 22nd Oct, 2017
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  18. The Y-man

    The Y-man Moderator Staff Member

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    You bottle it and sell it as "Fairfield Springs" ;)

    The Y-man
     
    The Y-man, 22nd Oct, 2017
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  19. Amber83

    Amber83 Well-Known Member

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    Ha ha.

    U obviously thought one bedroom units were a good investment option if u bought a few then?
     
    Amber83, 22nd Oct, 2017
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  20. The Y-man

    The Y-man Moderator Staff Member

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    I have written elsewhere, but I believed (and still believe) 1BR apartments can offer a very low exposure entry into the property market, with geographical spread (by in several locations than one house in a single place) as well as liquidity in rental and sales (cheap).

    This has changed a bit in recent times due to apra regs.

    The Y-man
     
    The Y-man, 22nd Oct, 2017
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