G’day Jim,
You need to set your goals and invest accordingly. If cashflow is important to you then it sounds like a good opportunity. However, the LVR on a 1 BR apartment will be low and therefore you need to have a bigger deposit. The capital growth for a 1 BR apartment is lower as well.
Assuming a 70% LVR and purchase price of $170k, you would need around $60k deposit (including closing cost). With that kind of deposit you could buy a bigger property with better capital growth prospects and if you invest in the right areas you may still be able to get positive cashflow.
aGood luck!

cheers,
Sanjiv Gupta

“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.” – Nelson Mandela

There is now speculation that US might drop their interest rate.

cheers,
Sanjiv Gupta

“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.” – Nelson Mandela

Hi Michael,
When is it scheduled to happen in Melbourne and are there free tickets for that?

cheers,
Sanjiv Gupta

“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.” – Nelson Mandela

Hi shanshan,
Firtly, welcome to the forum.
Before making any offers you need to consider a number of things:
1. Based on the numbers you provided, the gross rental yield is 5.95%. I wouldn’t really call this decent gross yield.
2. The fact that the property has been on the market for 6 months and has not sold means there are not too many people keen to buy it. As you said it could be the steep driveway or is there something else? I wouldn’t worry too much about getting a soil test but would definitely consider building, pest and independent valuation.

Based on the above, if I were to make an offer, I will do so at 15-20% below asking. Remember you can easily increase your offer price but can’t drop it.

You should also check if the rent is at market value. Usually with long term tenants the rents are below market value.

Unless you live in the same town, I suggest use a property manager.

cheers,
Sanjiv Gupta

“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.” – Nelson Mandela

Hi Tara30,
Its not unusual to pay 8.8% in country towns. I am assuming that includes GST. Other charges are also common and within reasonable amount.
That said, have you shopped around? You could contact couple of other property managers and ask them to give you a rental appraisal and schedule of their services & charges.

cheers,
Sanjiv Gupta

“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.” – Nelson Mandela

Good one, Milly

cheers,
Sanjiv Gupta

“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.” – Nelson Mandela

Hi PochPoch,
The way I look at it is if the “dodgy” suburb has got the right infrastructure (in terms of transport, schools, shops, hospital, etc.) it will eventually pick up. In the long run there will be enough demand and therefore both rents and capital value will pick up. The answer lies in your investment timeframe. If you are expecting to make money quickly then it may not be such a good idea to buy in one of these “dodgy” suburbs.

cheers,
Sanjiv Gupta

“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.” – Nelson Mandela

Hi Joel,
You could look using a long term deposit bond or bank guarantee instead of using your savings for 10% deposit (that said there are some conditions to get a long term deposit bond). Alternatively, negotiate a $5k deposit or something small like that. That way you can use your money until settlement time comes.
I have not done much research myself but $349k for a 2 BR apartment without a car park looks bit excessive. If you have 10% deposit ready, why don’t you buy an apartment now and use it for residence/rent now? There are plenty of 2 BR apartments without car park for around $250k.

cheers,
Sanjiv Gupta

“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.” – Nelson Mandela

G’day Colin,
You should consider the following before making your decision:
* Limited capital growth
* Low LVR
* Lower control over the property in terms of renovating or adding value
* High management costs
* As raddles mentioned, you need to look at the legals or residency conditions, etc.
On the plus side, Australian population is ageing and there will be higher demand for retirement living.
There is no easy answer but I hope this information helps.

cheers,
Sanjiv Gupta

“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.” – Nelson Mandela