VIC Rentvesting living in Melbourne

Discussion in 'Where to Buy' started by Moyondizvo, 10th Feb, 2017.

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  1. Moyondizvo

    Moyondizvo Member

    Joined:
    2nd Jul, 2015
    Posts:
    10
    Location:
    australia
    Hi Guys

    A brief intro , i started investing about 2 years ago and current have 2 Bris properties and still renting in Mel. I was just wondering given the low interest environment we're currently in if its better to purpuse a PPOR in the new estates where the price is still reasonable compared where i am currently living. The place i love rentals keep going higher and i think it will not be sustainable just to remain there. Rentals are ranging from 500p/w to 900pw for a 3 bed compared if we move to new estates will be cheaper to just by your a PPOR

    Would it be a wise move to buy a PPOR in new estates instead of continuing to build an asset base of say 5-6 IPs as that will improve on serviceability?
     
  2. Darren

    Darren Well-Known Member

    Joined:
    21st Jun, 2016
    Posts:
    132
    Location:
    Sydney
    I am in a very similar position,
    What i looked at is, how much is it to buy in the area I want to live vs how much is it to rent there taking into consideration how much growth is likely to happen in the area. Sydney for me is cooked so ill stay renting for now.
    My situation is as follows, rent $400, purchase on a similar unit in Cronulla id be looking at at least $580pw repayments at current interest rates, on top of that the cash I have ready to buy IPs will be tied up in one deposit on the PPOR
     
  3. hash_investor

    hash_investor Well-Known Member

    Joined:
    11th Oct, 2015
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    2,439
    Location:
    Sydney / Canberra
    if you are looking to stay in melbourne and do not mind a bit of commute then it is a wise decision to buy. However if you may move around before paying it off significantly just be mindful that melbourne yields are ***t.
     
  4. Simon Moore

    Simon Moore Residential & Commercial Mortgage Broker Business Member

    Joined:
    4th Mar, 2016
    Posts:
    556
    Location:
    Level 2 287 Collins St Melbourne VIC 3000
    Welcome to the forum!

    I live in house worth ~1.3m 3km from the city and pay $490p/w. Even on interest only I would be looking at a house about half that value and it would kill my ability to keep investing.

    For me I like the area I live in, I like being close to the city and with the type of yield that I pay it doesn't worry me too much.

    That being said when I start to think more seriously about having kids I might change my mind and decide to buy. It's a lifestyle decision for me.
     
  5. Moyondizvo

    Moyondizvo Member

    Joined:
    2nd Jul, 2015
    Posts:
    10
    Location:
    australia
    Thanks guys,

    I have 2 kids hence if i want to stay where i love means i have to around $600p/w rental in a decent place. Looking at the recent listings rentals are now well above which means the current strategy has to be re-evaluated.

    I have tried to do the numbers , i.e. if i move to the new estates, the chances are will enrol kids in independent schools compared to where i live with good govt schools. This effectively will likely workout to be similar only difference being that rental money will not help with reducing my loans.

    If easy choice and lifesytle reigns would stick with renting and continue building portfolio.
     
  6. Hazey

    Hazey Member

    Joined:
    16th Jan, 2017
    Posts:
    16
    Location:
    Timor-Leste
    Newbie to the forum here who is also tossing up whether to rent in Melbourne or buy. Having never lived in Melbourne before and with no contacts we will initially rent close to work for the first 6 months, so have some time to get to know the city.

    We are returning to Australia after living O/S since 2002 and have been saving hard and have around $300k in cash. We already have 1 house and 1 unit in Brisbane in my wife's name only, are quite new to the PI game and don't want to stuff things up.

    Long term, we don't really see ourselves in Melbourne (Mrs H is from Qld and hates the cold), so maybe rentvesting is the way forward for us.
     
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  7. ORAC

    ORAC Well-Known Member

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    1st Mar, 2016
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    170
    Location:
    Brisbane
    Check out my previous comment on another thread about the challenges of rent-vesting (I might need to post this as its own topic).

    Critique my Assessemnt
     
  8. KateAshmor

    KateAshmor Victorian Conveyancing Lawyer Business Member

    Joined:
    25th Jun, 2015
    Posts:
    711
    Location:
    Melbourne
    Rentvesting is definitely a trend I'm seeing, especially with first home buyers and interstate (mainly from Sydney) + expat buyers.

    If you're not familiar with an area, it's very important to do your research, as things like public transport serviceability, crime rates, schools and access to good cafes are crucial factors to attract quality tenants.

    And in the current Melbourne market, if a property seems like a bargain, there must be something wrong with it!
     
  9. paulF

    paulF Well-Known Member

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    28th Jun, 2015
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    Location:
    Melbourne
    One other thing to keep in mind is that the low investment environment might not be here for long!
     
  10. Zoolander

    Zoolander Well-Known Member

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    15th Dec, 2016
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    668
    Location:
    Sydney
    Fix em rates and shore up that warchest
     
    paulF likes this.