VIC Unit or Apartment

Hi everyone,

I want to buy my second IP. but because of serviceability issues, I am unable to borrow more than 350k. I am not sure between a 2-bedroom villa unit in outer suburbs of Melbourne or an old 1 bedroom apartment in a good suburb like Prahran or St Kilda east.

Which one is a better choice?
For villa units, what suburbs are better?
A quick search shows that suburbs like Tullamarine, Lalor, Thomastown, Epping, Broadmeadows and st Albans are in this range
I want to buy and hold the property for 20 plus years.

Thanks in advance

 

Geez, is there an option C? Units in Melbourne are not a great idea. Perhaps not too bad with a 20 year outlook but what are you going to do in the meantime? If your serviceability is shot now, you will be out of action for a long time after this purchase. CG will be low/ non existent for a while. Yield won't be great either.
With out knowing your exact situation, I would suggest Hobart. 350k is a good budget for Hobart and it's a rising market with better return. You buy well and you will probably be positioned to buy again next year.

 

Thanks for the reply, we are now down to one income and our financial situation will be better soon after my wife back to work, I want to buy in Melbourne area.
I don't know anything about Hobart and I am not comfortable to buy in a city that I am not familiar with.

 

Better get to what ur goals are or how fast u think they will grow. those places u suburbs mentioned for units are not exactly lacking in dev sites in terms of availability hence villas or units will always be in stock.

U better off doing H&L got that price if u gonna hold at least get some depreciation on top of the rent. An old unit esp in those areas could be more costly in maintenance

Villas do grow definitely had one friend who bought one in camberwell 600kish and was worth 900kish. Thought it is in the premium suburb

I bedders in prahan and st kilda purely for cashflow

 

Any reason not to wait until your wife is back at work so you can get a loan to afford something a little more likely to catch some CG in the future?

 

@The Y-man I am in the same predicament as the op. Ready to go for IP2. only want so spend up to 400k as I don't want to be topping up the rent each week for the repayment. At this stage I think I'm stuck with H&L out in the west, or a 2 bed "apartment" (in a block of say 12 units) in St Kilda/Prahan. Are either ever a good idea? The St Kilda one I know is not a great idea but I can sweeten the thought of it by planning to move into in 10-15 years when the kids leave home so that I can live in the city! I went to an open in Frankston North today with full intent on purchasing there, but there were about 20 groups, the house needed about 80k spent on it and there is no way it will go at auction within my budget based on the interest.. My rule til now had been only buy as close as I can to the city (west) and on blocks over 600m2... Seems I can't afford to play by that rule anymore unless I consider Dallas/Coolaroo

 

Actually I can't, I thought I could but I was way off! I think Dallas is probably my best option for now. I worry with Werribee that I will have to much competition with other properties when it comes to getting tenants and resale. Too much land for my comfort and too many new dwellings to complete with.
I'm holding for 15 years min.

 

Mainly FOMO as last year my 400k opened up a lot of options, 6 months later and all of last years options are 200k more expensive! I feel the longer I wait the less options I have. I really thought Melb had started to cool, but judging by the interest at the Frankston open it's hotter than ever out there!

 

@The Y-man i can see the 350-600 bracket only getting hotter with the FHB incentives being introduced

 

but H&Ls are in middle of nowhere like Mernda and most those suburbs do not have good infrastructures. Mernda is going to have a train station but a single lane plenty road for all of those population, soon gonna be double lane but still is not good.
I want to buy a place with a bit of land even a villa unit within 15-20km range from CBD not close to 30km.

 

Thank you for the comment, are you happy with your 2bd unit? how it performed so far?

 

Look at Melbourne prices and how they grow, that's my reason. even after my wife returns to work I am not going to buy anything above 550k, and I think by then, what is worth 400k today is going to be 500K.

 

I'm in exactly same position as you.