VIC Where to buy first IP in Melbourne under $540k?

Hi everyone, I'm new here and currently looking to buy my first home, an investment property in Melbourne. I'm still living at home and will contribute a deposit of $100k (I've sacrificed many, many coffees and smashed avo's) and need to keep purchase price to the $540k mark given the intense lending conditions at the moment. I'm in a mad rush to find something that fits this tight budget and need your help to figure out where to buy

I'm looking for an established single dwelling with room for improvement and future growth, in an area that is yet to have "peaked" and offers excellent infrastructure and plans in the pipeline. Also ideally on decent block of land with future potential (e.g. additional dwelling, subdivision, etc.). Right now my focus is on (hopefully) buying under market value and building equity, rather than looking solely at tax benefits and/or rental yield.

The million dollar question is... where on earth can I afford, and with this budget, where would you recommend I take a look? I've been looking in Frankston and Frankston North however even here, the competition is getting fierce and homes are starting to get out of my price range...

Any advice would be greatly appreciated! Thank you!!!

 

Check out South Morang, Broadmeadows/Jacana, St Albans, Deer Park, Ardeer

 

I would focus specifically on something that cannot be developed in the future but on decent land, these are the diamonds in the rough.

By this I mean look for houses on 300-400sq.
Developers are paying overs for everything that they can throw 3-4 on. Don't get caught up in that game.

I would be gunning straight for St.Albans looking for an old run down house on 300-400sq close to the amenities and just sit back and ride the capital growth wave.
15 years later when your little parcel of land is worth a mint and the council want more rates they will probably let you put 2 on their.

 

I was originally thinking similar ... that prices are high for 500-600sq so maybe 350sq vs 550sq would cost 350/550 of the cost (ie 2/3) or closer in, but basically everyone is thinking the same thing and 300-400sq are sought after and are really not much cheaper than 550sq and also not closer in. I found that for 2/3 of the land you pay about 80% of the price for the same distance out, or 90% of the price and only about 1km closer, if that (ie really not much different location-wise). I have since tossed out this idea entirely. The significant difference in size doesn't make up for the small price difference at all imo.

 

Werribee, Geelong, Epping

 

this has to do with the garden minimum req - as once you go over 400sqm, it starts to kick in.

 

You guys are amazing - thank you for the tips!

Thoughts on this one? Deer Park, under 600sqm and seems like a good ugly duckling... 23 Welwyn Parade Deer Park Vic 3023 - House for Sale #125501658 - realestate.com.au

I've never looked into Deer Park so I really need to get my skates on and research it!

 

I am a big fan of that style of home. I'm not sure what it looks like inside though - but it looks good location wise and from the outside. It's near Ballarat Rd and close to Brimbank shopping centre.

It's not for auction is it? See if you can offer 450 once your finances are sorted, and try and negotiate access to the property during settlement to give it a lick of paint.

 

Yep thats what I would recommend too. Get everything sorted ASAP, view the property at your earliest convenience since it looks like you're in Melbourne and give them an unconditional offer. You can get B&P inspection during the cooling off period if necessary, but since there are tenants already which is a bonus I don't believe its necessary. But check the rental so you can calculate the yield too!

 

Hi Werdna,

We recently went through the same process and also find that the houses are very competitive in that range.

Definitely have finances ready and like pentanol said dont be afraid to put a strong no conditions offer if needed.

Look at St Albans, deer park, lalor, broadmeadows for that range.
We bought recently at just over your price point in St Albans but had to be quick.
Pm me if you want rea contacts you can work with

 

Also have a think about new V old property. Decide on which of those strategies suits you best.

 

Why South Morang? Some of the worst infrastructure in all of melbourne..

 

Lol. $450..
This will sell mid 500's IMO, but a lucky buy will get it just over 500.

3 bed 1 bath on 530sqm in Albanvale are selling over 500 now.

 

If you don't know much about the suburb I wouldn't be looking at houses until you do your research on the area. - demographics, previous growth trends, what pockets have performed well etc.
as for ugly duckling, I don't believe so, there are heaps of double fronted weatherboard homes in deer park, many (not majority) in such condition).

 

Thanks for the advice and definitely looking into the suburb. And on looking at previous sold properties, you're completely right - these weatherboard homes are dime a dozen.

I initially thought the home would sell for mid 500s too, but similar homes on the same street have sold for $400k and $451k in the last few weeks..

 

Thank you all for your help and advice - really appreciate it. Am keen to buy in Frankston as I know it inside out. But looking at other options too!

Any thoughts around whether I should use a buyer's advocate to purchase the investment property? E.g. they would have access to off-market and hopefully under market value properties.

Or has anyone here used a property investment company like A Team (Sasha Hopkin)? My inclination is that I should always steer clear of these companies that seem to be a "one stop shop", but keen to hear if anyone has had success using them.

 

If you are in Melbourne already then best You buy yourself, no one will look after your interests like you can.. However have a chat with these companies and See if you get any pointers? You also get a good nudge in the right areas to research by being on PC. People talk about what they have recently bought here. You can consider why they bought there and what kind of research was done before they dove in. You can gain a lot by learning from that already done research, so ideally private message a person who has bought in the area you are looking in and you will already get some very great pointers! I only bought this Sunday and have been PMd 3 times about the area and my experience for example and I had some contacts and advice from my learnings!

Drive around the area and see how much it has to offer. I like the option of jacana, but was priced wayy out and bought in west recently with my 400-450K budget after a number of colleagues who live there talked it up. If I were you I would draw a 20km-25km circle around the city (mine was a 30Km one ) then Look at all the places I can afford and hop in a car and drive about to check it out! Then I will message people here you have bought there and ask why they did it and what negatives they found. Then make your own call after that.
Best of luck!

 

Play to your strengths. There are markets within markets (well performing parts generally in every suburb), so if Frankston is your backyard, maybe hone in on there?

 

Look to Sth East of Frangers and Nth West of Frangers for value...

 

Hi

Ok so after looking at a map is South East Frankston the area around Heatherhill Road and Golf Links Road and North West Frankston the areas around Gould Street?

I am a little concerned that the North West part of Frankston which to me is Gould Street basically starting from the Frankston cbd and all the streets running off it isn't really the best value at this point in time. Any further west is the bay and any further north is Seaford.

Regards,

alicudi