Hi,
I am planning to invest in a city apartment. I have the below 2 options
Its close to spencer st..new apartments off the plan…will be ready in 2013..I have to pay 10% now and rest in 2013.Body corp is around $2000 – 2500
Option 1:
1 bedroom + car park –> $409,000Option2:
2 bedroom –> 391,000 (no carpark)This is my first investment. I have just started working and I am renting at the moment. I am investing so that I can save some money.
Any thoughts would be helpful. I am a newbie.Thanks & Regards,
V
Not a fan of off the plans sorry. In my experience, you lose the first 2-3 years of capital growth due to the inflated purchase price, the estimate on rental income is always excessive and it's likely the place will be vacant for some time when it's ready given all the apartments will be released for rent at the same time. Competition may well force you to reduce your asking rent.
Why not go for a 'near new' property instead – you'll avoid the competition, won't overpay and still receive all the handsome depreciation benefits (more info on depreciation here: http://blog.rentwise.com.au/index.php/2010/05/18/depreciation-reports-please-explain )
Vinay, I would be cautious. there is often over supply of innercity apartments and not much scarcity value hence not the best capital growth potential. The tennants are usually young and mobile and will quickly want to move to the latest new fancy building, other words short term tennants. New buidings will be built and the older ones may become less desireable. I also agree with what Kate says.
Thanks Kate and Crusty. Thats really helpful.
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