Hi,
I am looking to buy an investment property in Victoria not too far from Melbourne. I will have $60K to spend on all costs and I would like to buy a house renovate it add some value and take the equity to buy another one. I want to hold onto properties for the long term and am looking for neutral or positively geared properties. I am probably going to start at the bottom end of the market looking for something in the $200 to $250 price bracket. I am thinking somewhere in Geelong? Has anyone got any advice on areas in Victoria that I am going to get good capital gains on that are not too far from Melbourne where I live.
Also I have been advised to get an interest only mortgage and tip and extra money into my PPOR. Is this a good strategy?Any advice is greatly apprecited?
ThanksYes that is a good strategy.
Remember to look at the price of unrenovated properties, and what the same sort of thing seems to cost if already renovated. If the price difference is the same as the cost of the renovation itself, don't bother with that suburb. Find one where you would manufacture extra value by having done the renovation.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
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Milliet wrote:I am thinking somewhere in Geelong?At that price bracket, look into areas like Norlane and Corio. If you can stretch a little more, look at North Geelong. I'm a big fan of the beachside northern suburbs of Geelong and think there's much potential here. Only time will tell, but Geelong is becoming a 'mini-Melbourne'. There's a fantastic lifestyle there with great infrastructure, and the suburbs within ready access of the CBD are still well priced. There's been upwards price movement in Norlane over the past year or so that I've been following it. No surprise I guess. At $190-200K for a 3 bedder on a 700sqm block, the deals won't last forever. Bear in mind that if Avalon does go international, it'd mean good things for Geelong's northern suburbs.
Of course there was also previously talk of a Disneyland in Avalon, but that's a separate thing altogether and I'd assume that is not likely to occur at this time, at least not till economic conditions improve and Australia starts to really pull in tourists.
Milliet wrote:Also I have been advised to get an interest only mortgage and tip and extra money into my PPOR. Is this a good strategy? Any advice is greatly apprecited? ThanksYes this is a good idea to aid in paying down non deductible debt. Even better is if your PPOR loan has a 100% offset account that also acts as a transaction account with the features of a cheque book and credit card. This way, if your PPOR ever becomes an investment, you can remove your money from the offset account (hence increasing deductible debt on your previous PPOR, which is now an investment property) and put it towards your next PPOR.
In a market that is not really moving I think this is a risky strategy in this market. Also there is more money in the upper market rather than the lower market. Frankly there are better products in the market such as our development model where investors pool there money to buy a development project.
To make real money you need to be creative and know what you are doing. I partner with some very smart and experienced people.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
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Hi Milliet
I am assuming you are looking to buy, renovate and then potential sell or access the equity.
I have many clients who have limited equity who i have referred to Nigel and who have subsequently invested in one of his developments and made a lot more money than they woould have done by buying an IP with high entry costs.
Once you have your funds returned and you have covered any Tax liability look to pay down your PPOR and recycle the loan to deductible debt and then look to commence your IP journey.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Nigel, how much money does it take to be in your pool of investors,and what is the average projected profits of your developments? Thanks.
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