I bought a 2BR unit (low rise apartment) in Southbank(3006) in Oct 2010 for 500k and currently the market value is 550K, should I keep this or sell and invest come where. What is the prospect for low rise apartments (3 floors) in Southbank?
Hi,
It’s very hard to provide any advice with that amount of information. Is it a PPOR or IP, what are you wanting to achieve?
Regards
Gibbo
I basically want to know how is the prospect (capital growth) for low rise apartments in Southbank?
sorry my crystal ball is broken this evening
py .. you may be going through 'first year jitters'
Thats when you purchase a property .. and when it hasnt made immediate gains within six to nine months .. you panic and doubt your decision in the first place.
People will tell you 100 times over that property is a longer term investment option and if you want to make serious gains on it you wait over time. Thats whats best described as 'surfing' inflation. It means your majority of gains will be against the value you borrowed versus the growth due to inflation on both rents and capital gains on your property.
Which is a slack way of saying .. if you sit there and wait 10 years .. you'll have made SOME money on it.
Just between you and me .. i cant be the type of person who sits there and holds on for a lifetime. I have too much living to do. When making my purchases .. I allocate a specific period of time for them to prove themselves. If they havent .. I remove them from my portfolio.
SouthBank is the better of the two new development zones close to the city. If you'd told me you had invested in Docklands I would have just said SELL. Having watched SouthBank for many years now .. its gone through a period where it was all relatively new apartments and not much to do there. But the area is picking up around it. Claredon St has quite a life now to it .. and of course it has direct access to everything that is city based. Need I mention that Casino building nearby?
For anyone who does business in .. near and around the city .. a southbank apartment is still darn convenient and much in demand .. both in rent and sales aspects.
New developments are coming online in the Southbank vicinity. It not only breathes new life into the area with newer apartments .. it also creates extra demand for the area. More buildings = more foot traffic = more viable commercial enterprises.
Stick with this one .. its a good 5 year proposition. And thats a short enough timespan to hold and wait on.
Recently there has been a HUGE shift in demand for Southbank property for lease. Properties in the area are now demanding higher rents than comparable CBD properties.
If you have an apartment in a low-rise building, I'm assuming there are less than 20 apartments in the building. This is capital growth gold. When my clients ask what to look for in an investment property, the first thing I tell them is EXCLUSIVITY. Both tenants and owner-occupier purchasers will generally pay more for a property in a smaller development. Whilst the Southbank area grows and larger developments pop up, your apartment has a point of difference – it's not surrounded by hundreds of other apartments above and below.
Stick with it if you can, keep the property in good condition and ensure small improvements (such as fresh paint in between tenancies or appliance updates) are carried out and don't be intimidated by larger developments – they are good for you!
Also another point to think about, around 50% of property owners miss out on thousands of dollars each year in tax deductions as they neglect to claim depreciation. No matter the age, most properties are eligible for depreciation claims. Every year you should arrange a Tax Depreciation Schedule (cost between $500 and $700 – also deductible) to ensure you're receiving your maximum return.
Furnished rentals worked exceptionally well in the Southbank area and can provide a higher gross rental return and more tax deductions though depreciation on furnishings. Melbourne Corporate Rentals are a company that specialise in this type of letting and can advise on the best options for gaining higher returns.
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