Hi all, I have a bit of saving and with my current borrowing capacity, I may be able to buy something around $200k to $250k. My options are: 1- Buy a piece of land and leave it till a few years later to sell or build 2- Buy a property in regional (not sure if I can buy a good investment within this price range) What is your opinion? if you suggest 1 then where should I look for land and if 2 which regions and type of property? Thanks for your help
1. Land = no income so no tax deductions and no income coming in! Unless you intend to develop it fairly soon after purchase i wouldn't bother 2. you can still get units like this one https://www.realestate.com.au/property-house-vic-werribee-135614398 in Werribee - about 10 mins walk to the train station. could renovate down the track Mildura - prices have risen a fair bit lately but units/townhouses haven't risen as much. Still plenty available under 250k. Yields are good. You could probably still get a house for 250k that needs some renovation work. Traralgon - take a look, seems to be a rising market - might get a unit/townhouse for under 250. They would be my suggestions to have a look at and do some research on.
I am not sure if you are still looking at this price point but thought I would add a couple of thoughts. 200-250k is a tight budget, if you could stretch to 300k it would make a big difference in the options you would have to choose from. As a couple others have mentioned, Adelaide and Brisbane still have a few options for this price point. Plus, at this price point, the yields are usually quite high making it easier to hold. If you jump onto realestate.com or Domain.com it can be easy to sift through properties that fall within your price bracket. I hope this helps!
Assuming you have $50~60k deposit, I'd rather invest that into comm prop trusts (or company shares for that matter) The Y-man
Why? whats the expected return on a 50k prop trust investment vs a leveraged 250-300k real estate investment?
For me, my knowledge of resi is limited to Melbourne (and parts of Brisbane) - so a $250k investment would be a 1 bedroom apartment in somewhere like Noble Park. It'd rent for about $220 pw - but given there's plenty around, and limited market for 1BR, would be looking at barely break even after rates, OC etc. Further, the new tenancy laws here would mean gas/elec/fire inspections and a lot of tenant freedoms inc keeping pets. It'd only take a broke <something> or a months vacancy to blow the budget right out. Given the invested capital is $50k (+ 5% stamp duty + legals), a blown water heater, new carpets, repaint can easily amount to a huge bill I may not be able to afford (given the price range we are looking at here). ...and then there's the growth issue. I do hold a 1BR apartment in a more prestigious innercity sub (Prahran) and in all honesty (I keep writing about this as "the lemon" ) prices have not moved since 2008.... But let's say the apartment in Noble Park did double in ten years to $500k (stranger things have happened!!) - then yes the leveraged investment would give a massive 480% return compared to the 79% (+ CG) return for the prop trust. But for me personally, I would not be up for that risk. I'd rather stick the money in the CPT, and wait till I saved up more for the resi venture and/or improved the serviceability to do a bigger deal (note - could cash the CPT in at the stage I saved up enough for a bigger deposit). The Y-man
$250k in Docklands not sure it gets you the Penthouse yet maybe a level or two down. Give it 12 months.