PPOR vs IP

Discussion in 'Where to Buy' started by Watson17, 8th Aug, 2017.

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  1. Watson17

    Watson17 Member

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    23rd Jan, 2017
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    Location:
    Melbourne
    Hi Guys,

    Looking for some advice about a situation.

    Currently looking first and foremost at buying my first home as a PPOR, have all the finance ready to go and have been looking at a 2 bedroom unit in the inner south east of Melbourne. The plan is to live in it for 3-5 years and then keep for an IP and move into the next place (hopefully a bit more space etc).
    Have found a property that suits me perfectly in terms of my PPOR and is well within my budget. Have been doing some research on the apartment (in a block of 30) and it seems its selling for less than the vendors paid for it in 2011, they have it as an IP as it is tenanted. It looks as if they are the only owners so i'm wondering if they bought off the plan. Is there anyway to find out this information?
    I know for IP purposes buying in medium/high density doesn't work that well so should i keep that in mind when buying to live in first or does it make more sense to buy to live in and then when the time comes to move on, look at the numbers on how it stacks up as an IP and either keep or sell?

    Is there anyway to look up what other apartments in the block sold for?
    I guess what im asking is how much weight would you give the PPOR side vs the IP side looking down the track?

    Feel free to ask any questions, but any advice is appreciated. I understand a lot of this is very vague.
    Thanks in advance
     
  2. Simon Moore

    Simon Moore Residential & Commercial Mortgage Broker Business Member

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    Location:
    Level 2 287 Collins St Melbourne VIC 3000
    Who ever sorted you finance should be able to get a report showing a history of sales. Onthehouse.com.au will also often have the sale history. If you have any issue feel free to let me know and I can help you out.

    I think about a PPOR and an IP purchase differently. A PPOR you are going to live in, do you like the area? Is it close to work? etc. Where an IP is a much more cut and dry equation.

    I would be asking myself the question, am I happy living for 3-5 years in a place I hate (or is suboptimal) to get a better return?
     
  3. Watson17

    Watson17 Member

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    Melbourne
    Thanks for the reply Simon.
    I can ask about the report about previous sales history from my broker and see if he can help me out with that info.

    Its perfect for a PPOR, great location, nice space for a apartment, North/West facing for light and sun etc.
    I guess it probably makes sense to separate the 2 and focus on one or the other. I guess the only thing is if i can hold it as i know transaction costs of buying and selling can add up.
    Would it be a concern if your buying a PPOR and the value has gone down in 6 years?
     
  4. Ross Forrester

    Ross Forrester Well-Known Member

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    Perth, Western Australia
    The prior purchase history of the apartments is largely irrelevant. What is relevant know is the apartments future prospects for capital growth and how you feel about living there.

    The fact that it is a few years old can be a good thing. The former owners have taken the pain from the developers selling off the plan and the market had had time to develop to adjust to that stock so you have a nice sales history.
     
  5. Watson17

    Watson17 Member

    Joined:
    23rd Jan, 2017
    Posts:
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    Location:
    Melbourne
    Appreciate the comments Ross, thanks a lot. My initial thoughts are that the owners have maybe paid a premium for an off the plan development. I'll keep your comments in mind.
    Thanks again
     
    Simon Moore likes this.