Which of these areas would deliver good growth 12-24 months

Discussion in 'Where to Buy' started by BCR, 24th Oct, 2016.

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  1. BCR

    BCR Well-Known Member

    Joined:
    18th May, 2016
    Posts:
    101
    Location:
    Sydney
    Hi All,

    Have been doing lots of DD over the last month & narrowing down, hoping some locals can point out which options may be more suitable based on below before I hop on a plane..

    Looking for a house suitable for demolish & duplex build in 5+ years with a budget of ~$500k.
    Short term growth with long term appeal/potential, will do cosmetic reno on settlement for a yield/equity play.

    Must be close to amenities, trains, good schools, coffee shops (amenities/transport become more important as I move away from CBD) & future fit for duplex build.

    I understand the above is a wish list however hopefully can narrow down that bit further.

    Hit list in no order:

    Frankston
    Carrum downs
    Broadmeadows (Is this similar to what Redfern in Sydney was ~15 years ago? Or will it never gentrify?)
    St Albans
    Craigieburn
    Albion
    Sunshine North

    Open to other suggestions have been watching these areas for a while to see what's coming through - I like the idea of Craigieburn & Carrum Downs, Sunshine Nth..

    Any insights/advice appreciated
     
  2. Connor

    Connor Well-Known Member

    Joined:
    31st Aug, 2015
    Posts:
    437
    Location:
    Melbourne
    It's great your thinking about manufacturing equity because this will be the way forward over the next few years as markets peak and stabilise with a lot more subdued growth.

    However in regards to the knockdown/rebuild strategy in the suburbs mentioned i think you'll need to narrow it down further...

    Eg. To buy a home in Carrum Downs today on a decent block will cost 370k+
    Let's say 400k including purchase costs ect..
    Build a duplex 3/2/1 about 360k
    Total cost $760k without any interest or additional costs factored in..
    So in today's markets you'd need to sell at 380k each just to break even...
    And even at that break even price point you'd be competing with house and land packages in the area...

    Predicting end values in 5 years times is Abit of a gamble...some do it with good success...but personally I won't do a development unless the profit margin is there in today's market..

    I think you'd have a similar situation in Craigieburn also.

    Hope this helps alittle
     
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  3. Greyghost

    Greyghost Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    1,635
    Location:
    Brisbane
    I don't know enough about Carrum downs over say carrum proper. I know Margaret lomas was banging on about it some time ago.

    Forget:
    Broady
    Craigieburn

    Maybe:
    St. Albans
    Sunshine north - depending on how far back from Ballarat rd

    Preferred choice:
    Frankston
    Albion
     
    BCR likes this.
  4. BCR

    BCR Well-Known Member

    Joined:
    18th May, 2016
    Posts:
    101
    Location:
    Sydney
    Thanks for the great advice. Perhaps if I was to hold for longer period (8+ years) to overcome any burst of new dwelling activity or market fluctuations?

    Planning to continue to build my asset base over the next 4 years through further IP purchase whilst I get my head around development.

    Thinking if I can secure a good block in a great position that would welcome a 2/3 townhouse or dual occupancy in future may be worthwhile.

    I am having to rely on future market movement, however if I can do some cosmetic reno cheaply I should hopefully manage holding costs/cashflow over the period and have the choice later to either subdivide and sell, or build?
     
    Last edited: 25th Oct, 2016