Getting back to the original question. Melbourne metro has certainly slowed down and the rental yields are very low. Rents have not caught up with the explosive growth during the last 18 months.

Regional Victoria is doing quite well as you can find many properties with above 6% yield with solid capital growth. Areas such Ballarat are performing well and set to rise even further after the state government announced that it will be proceeding with the Regional rail link. It is also very interesting to read up on the councils and state governments blue print for Ballarat as it is going to be a major regional hub.

Hi Simmo,

I would also have to agree with the above comments, in that a LVR of 36.9% is far too low, especially in the accumulation phase of your investing activities.

I’m 26 and recently purchased my 4th property. My LVR is quite high at around 85%, however, that does’t concern me as I know I have the assets to back the loans up if something goes sour. If you’re picking your suburbs well and buying at the right price your LVR will naturally improve due to capital appreciation.

As I’m young and in the accumulation phase I intend on buying as many properties as the banks will allow me to before turning 30. I think it might be prudent to set yourself smaller goals/targets so that your ambition of retiring comfortably with a large, profitable, property portfolio can be achieved. Similar to what YI has done, ie wanting to achieve $1m networth of property assets by the age of 28.

Also, retiring at 60 is an incredibly conservative goal. That means you would still have endured the 40 year debt in working for someone else.

Kris

You should be able to find a 2 bedroom apartment in Seddon, Footscray, West Footscray for that price range. Being 5-7km from the CBD they represent good value for money.

Hi,

I think you're crazy if you sold any of the mentioned properties, given their location and the fact that they are +cashflow and supporting themselves whilst putting a few dollars in your pocket.

I find it challenging to comprehend that these properties are 90% geared and still +postive cashflow. How long have you had these properties for? Have they been re-valued since purchasing them?

Given that these are positive cashflow properties whats driving you to sell? Do you think rents  and demand will decrease in the forseeable future?

MrKudh80,

You're certainly correct in suggesting that the west has industrial segments. In saying that though it would be wise to check the inner west (5-7km from the CBD) as the nature and feel of that market is rather different to the middle and outer western areas which are more industrial and tend to be less developed as described by your friends.

The inner west is going through an interesting period of gentrification as trendy professionals move into suburbs like Seddon, Yarraville, Footscray etc..after visiting these areas you can actually see the renewal and development taking place as governments and local councils are increasing their capital expenditure in these suburbs (eg state governments recent $1b plan to gentrify Footscray which has commenced).

I also agree with the some of units4me's comments in sugguesting that the eastern suburbs houses are generally better developed and situated on nicer streetscapes then the west. For this reason you pay a premium for realestate in the inner east.

It should also be noted that the inner east is currently undergoing a massive correction due to the inflated house prices. In some suburbs hundreds of thousands of dollars have been wiped off during this recessionary period. The inner west on the other hand has been alot more stable and positive as the area is quite undervalued.

In short the inner east is quite a mature market. The inner west is the future.

Best of luck anyhow and make sure you do plenty of research in the area you're looking to buy in.

Cheers

The place has awesome views. Well done with the purchase!

What was the purchase price?

Proximity to the city is great in these areas and so is the infrastructure which is continually developing.

I agree that there are certain pockets which you should definitely keep away from (eg Francis St Yarraville). As mentioned, Yarraville/Seddon are quite gentrified and trendy suburbs and as such this is factored into the price. They definately are the premium suburbs in the inner west.

West Footscray and Footscray also have good access to the city and these areas are rapdiyl developing as the state government/federal government is in the process of injecting substantial money in these areas…

Hi Yellina,

The inner west is substantially undervalued, especially Seddon, West Footscray and Footscray given the close proximity to the city.

The area has good infrastructure in place and is continually improving, for example, the Footscray urban development plan (Footscray is a Principle Activity Cetre) and the state governments plans to extend the rail infrustructure  (Footscray to Caulfield underground rail link).

To answer your questions:

1. Absolutely – check the REIV site for median price history for the last 5 years to verify this
2. Yes, as mentioned above and in Hany's post
3. Given the close proximity to the city and especially docklands (7 mins on Footscray Rd) the area is attracting young professionals. This will increase further once Docklands develops (ANZ headquarters is under developement and Habour Village is now open). NAB headquarters are at Docklands also. These developements will have a flow one effect on the Inner West in terms of professionals wanting to live closer to work and having an inner city lifestyle.

Cheers
Kris