I have an IP in Maidstone (Melbourne) since 02, it’s highly -ve geared. I checked the long term trend in domain.com.au the growth rate should be over 13 % pa., but the trouble is I don’t see other properties in the area grow in value much. It’s 7K from the cbd and people have been trying to talk up the Melbourne west fro a long time. Just would like advise from my learned friends your opinion of Maidstone in terms of future growth, and should I sell it to cut the loss.
p.s. does anyone know how to post a new thread in the somersoft forum, I look top to bottom in that web site and can’t find how to do it.Hi ttman,
If it’s within 7 km’s of the cbd I think that over the long term you should be o.k. According to some, the Melb boom ended at the end of ’03 (maybe earlier) so it may be the wrong time to be evaluating the cap growth.
Is maidstone surrounded by suburbs that have already boomed, or are being ‘gentrified’ recently? if so, you may find there will be a flow-on to your area as the others get too expensive.
A lot will depend on location and amenities in the immediate area such as transport, schools, shops, parks etc.
If it is neg geared, but you can service the cash drain without too much hardship you probably should keep it; treat it as a forced savings so to speak.
Also, have you had a depreciation schedule done yet? If not, there may be significant tax savings to be had which can improve the cashflow situation. Consult with an accountant who is property wise on this.Cheers,
Marc.
[email protected]thanks Marc, I probably will keep it a little bit longer but sometimes not sure if it’s actually worth it.
Yeah, I understand. You need to re-evaluate what your goal for this property is/was. Try to look ‘big picture’ for now.
Did you buy it with the intention of keeping it long term? if so, it is way too early to assess it’s performance. Look at it after 7 years – this is around the time-frame for properties to get close to doubling in value (7-10 years historically). If it achieves this it is performing to the average.
Is there anything you can do to improve it’s value and rent return?
For example, add ducted air/con & heating to increase the rent by $10 per week. Something like that.Cheers,
Marc.
[email protected]Hey TT man, are you still holding your property in Maidstone? Prices have been very flat recently. I am looking to buy an older house there on a large block, but am concerned as you are.
Chief Wigam, I am still keeping it because the statistics from various sources indicate Maidstone had good growth in the past and will perform better than the melb average. But all these talking up of the melb west, I think I will stick to the east or south east from now on.
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