I spent last weekend checking out Frankston getting a ‘feel’ for the area.
What I saw as the main key decisions or aspects to consider included:
1. Location – Frankston Central, Karingal, Frankston Heights, Frankston North, Langwarren, Carrum Downs/Skye, Frankston South
2. Property type and Age – Unit or House (I’ve grouped these two together as, generally speaking, if you want something less than 15-30 years old you are looking at a unit)
3. Future development potential – i.e. pay more for the large block with a view to develop units.
A sample of the various properties types I saw:
a. New(ish) villa units on a block of 2-5 for around $235k close to CBD and beach – average rental yield (4.5%), great depreciation but potentially smaller capital growth due to land component?
b. Older (15-20 years +) 3 bedroom houses in Karingal or Whistlestop estate for around $225k – no depreciation, OK cashflow (5%) and fair capital growth due to larger land component?
c. Bulldozers on big blocks in a great spot (either near CBD and/or beach) – average/poor cashflow but future development potential (i.e. 2 – 3 units)
d. New house and land packages out in Skye, Carrum Downs or Langwarren – stamp duty savings, large land component, excellent depreciation, average/good rental yield but far away from the beach and CBD and far less ‘uniqueness’ or scarce factor.
I think I’ve just asked how long is a piece of string, however, what types of properties do we think would make good choices and why?
Domcc1,
The bottom line is: IT’S UP TO YOU.
I don’t understand your point here. If you like any (or all) of these properties (and BTW excellent summary) then the final decision needs to be that of the person handing over the $$$ in this case YOU!!!
I have discussed by views with you in private re the area as per your questions, and I will gladly repeat them here: I THINK FRANKSTON HAS HUGE POTENTIAL FOR CG WITHOUT A SHADOW OF A DOUBT AND HAVE DONE FOR YEARS!!! Strange how after saying it for so long, now that the magazines such as API print an article, all of a sudden, people are starting to take notice; prior to that my comments were dismissed by many.
If you like the area, think it has what you are looking for, don’t mind a bit of reno work (on some) and are a “buy and hold” type of investor, then Frankston (and surrounding areas) all along the Pennisula are definitely worth considering.
Happy Investing!!! [biggrin]
Jo
Like monopoly says its really what you are comfy with . Frankston is a top location if you are wanting CG . I belive it is still under valued.I personally like frankston heights frankston south frankston central. Other parts will still have CG but I think the beter parts will be reconised first.
Cheers Rick.
P.S. Remember land goes up in value not the building on it.The building only gives you money along the way (rental income)
Thanks for your comments. I do realise it’s up to me. I still need to decide exactly what will suit my current situation best and will now leave you all in peace as I do this [blush2]. I guess I just wanted to spark a bit of discussion regarding this selection.
Thank you Rick for bringing me back to the ‘key principle’. I had been getting to tied up in the details and was bogged down thinking about cashflow and the like.
I’ve recently been reminded of how it truly is the land that appreciates (and I’m a 26 year old investor!).
House and Land packages in Narre Warren South, Victoria:
2001 – Land price – $66k
2001 – House price – $113k2003 – Land price – $85k
2003 – House price – $120k2005 – Land price – $135k
2005 – House price – $126kThe above is a real example I wanted to share with the forum of my sisters house she built in 2001, my IP #2 I built in 2003 and the prices I found enquiring about them today.
Given I’m an a decent wicket and am still young, maybe I’ll go for the house in the nicer part and aim for capital growth (cheers Rick!).
Maybe try 4 something a little diff . Say buy a house with a fully self contained unit , for the little extra in price you maybe able to rent them seperate and your return could be a lot higher. Or look for a house that needs a paint and gardens done , you will pay a little less put a bit of elbow grease into it and get a beter return for your money. Or look at a house with a big block down the track dont have to buy land just build on it .
Hope this helps Cheers Rick [drummer]
[4eyes]We have just purchased a property in south frankston and sold it within a week for a good net, at the moment the market in frankston is all over the place so there are some great buys. $500 worth of paint and 200 on the garden and elbow grease and were away. If your willing to look hard there are some sensational buys. Dont under estimate baxter.
For those that are not familiar with it BAXTER is a neighbouring suburb to Frankston. [biggrin]
If you could find a big block and the house was falling down definetley subdivide with council approval. I would not build as there is always problems and a whole lot more stress dealing with builders. If it is in a great location and you bought it for the right price you should make an easy profit. The money you would use to build could be better leveraged using it as deposits on simiilar properties.
We have just purchased a property in south frankston and sold it within a week for a good net,You sold it within a week? Is that a typo?
I have been advised by a real estate contact of mine who has sold in Frankston for 20 years, “Confine your purchases to south of Cranbourne Road”.
This guy tried to make me rich by offering a parcel of land for $180k which sold for $450k 18 months later, I dithered and missed out.So I listen to what he says.TO be rich oneday, buy properties in north of Frankston. It has excellent Northerly Aspect which is good for lower power bills and for environmentals. Positive cashflow will come about with elbows in greece. Cranbourne road is like a peice of string, whick is like capital gains how long nobody knows. Remember Frankston North and you will be rich with love for ever.
What you should consider is the relative opportunity of each i know the area very well and would say that carrum downs is the most undervalued (note i own an agency in Carrum Downs) call me on 97829977 as i specialise in development if you like
cheers bill
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