Starting my property investment trip

Hi,

I’m just starting to get into the property market by doing my research. Im currently with the first home buyer super saver scheme to get the final dollars for my deposit this year. I’m looking to buy a property for about $550k.

I’m seeking some help regarding making a decision for buying my first home.

I’m looking to buy in Melbourne (area) and my first home should be an investment (after having lived there for a year to avoid stamp duty) enabling me to buy a property to live with my family in the future. So in brief, the decision should be purely based on numbers and predicted outcomes.

I was wondering how I could make such an informed decision (eg what are the statistics to look out for)? For example, I’ve read that Epping might be a good option. If not purely based on numbers, I also like the idea of closer to the beach (eg Mentone?) What are other good suburbs?

My main goal is capital growth and not so much yield.

I’m also eligible for the first home grant but I understand brand new properties aren’t a good investment?

would be great to get your insights!

 

Welcome.

Some of my general tips which have worked well for me in terms of CG and building a large portfolio.

1. Buy in value suburbs, eg ripple suburbs from ones already moved. If a suburb has just started moving and you can secure it at a decent price relative to value then sure.
2. Buy with good land content
3. So obviously then buy a home. I personally believe units will underperform homes over the next 10 years due to demographic shifts, generally speaking.
4. Buy an established home, nothing new and fancy
5. Buy something you can add value to in some way. If it has development ability then even better though often you will pay some premium for those


Just my 1.5 cents.

 

Hi,
I have another question regarding investment properties.
I am a bit confused why houses outperform townhouses in the long run. If a townhouse has the same land as a house in the same area, would the capital growth/value be similar over the years?

 

Even if the same land (which would be unlikely), there is more reno/redevelopment value in a house (separate title) than a townhouse (body corp).

 

Previous posts have hit the nail on the head. I would also add when looking for a property and focusing on capital growth you need to consider the demand of a property. Demand inherently drives growth over time. This is why many people (myself included) suggest avoiding apartments (not all of them) as the supply of apartments can be easily increased (if they aren't already over-supplied) which creates little demand and in turn little growth. A general criteria to follow could be:
1. A high demand house
2. With value add potential (you can create equity/growth)
3. In the right market (location)
4. With an X-factor (sub-dividable, development potential, etc.)
5. Low vacancy rate.

 

No worries TAJ. But everyone has to start somewhere (I guess you did also started at zero one day) and beginners should be allowed to ask questions in this forum too .