Hi All – I am currently looking at an apartment complex for sale in melb central. My ideal plan essentially is to buy a two bedroom apartment close to the city and rent one room out or both. There is a two bedroom apartment going for 349k. 10% deposit now and pay the lump sum on completion (completed in just under two years).
i have read articles on this site and others about buying off the plan etc. im after some advice on weather or not melb central would be a good first home owner purchase. or should i keep looking on the outskirts of melbourne as ivebeen doing. The only reason i would go for the 349k one is becuase i can easily afford the 10% deposit now and by the time i have to pay the lump sum will have saved alot more money and be in my job (hopefully) with a higher pay (i have a pay rise next year if all goes well). however if i was purchasing now i would only be looking at spending max 230k for a 2 bedroom apart. The only downfall with these melb centra apartments is there is no car space and i have a car!
I would appreciate any comments on this issue.
thanks and regards,
joel
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
I tend to agree with Sanjiv.
Another point to consider with ‘off the plan’ apartments and townhouses is they are notorious for being over priced because the developers build their costs, ads and agents commissions into the price. Also beware of rental guarantees – again; built into the price.
It may be better to look at recent developments near the one you are considering (say; completed within the last 5 years) that have had some resales within the complex, and also as a better comparison on price to the one you are considering. You may find one at the same price nearby with a carspace.
The resales are more accurate in terms of value as they are sold as an existing property that people can see and inspect and compare to other existing properties in the same area.
You may find that many of them have sold for less than the original asking price; especially in the CBD after the glut of apartments that hit the market in recent years.
The only problem will be the shorter settlement as they are already built, but you can negotiate longer settlements and small deposits sometimes ($1,000 is not uncommon). You may have to compromise by offering the asking price or near it to get a long settlement and smaller deposit. Make it a win-win scenario.
Personally, I think you may be better off to go for something with land content and at least one car park, and buy within your current budget for your first foray into Property Investing.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
HI there, thanks for your advice both of you. I think ill take it on and keep looking. however im still curious to have a look at the melb cent apartment. i have found heaps out there witha car space. actually just went to an auction in hawthorn to check it out (never been to one) was very interesting.
Thanks again
Joel
hey all,
thanks for your comments above. I guess the reason I'm looking at buying off the plan is because in two years (when the complex is finished) i will be better off financially less in debt and be earning alot more at my work. I guess there is no gaurantee that the price will go up in the apartments… if they go down id die!
. So yeh thast the reason id look at off the plan…. gives me time to settle save more, and earn more rather than start paying a mortgage off now (only jsut started at my new job – im off probvation now to).anyone know the best way to compare prices of the off the plan complexes in the last 5 years to that of what tey are worth now? any help would be grealy greatly apprecaited.
Cheers
Joel
All you need to do is compare the resale prices to the original selling prices.
Keep in mind that In Melb over the last 5 or 6 years there was a fairly large over-supply problem, and many investors went for the off-the-plan strategy to flip, or get some cap growth before settlement, and many did their dough.
The resale prices for that period were mostly terrible, so they won't give you a really good indication. Be careful.
. So yeh thast the reason id look at off the plan…. gives me time to settle save more, and earn more rather than start paying a mortgage off now (only jsut started at my new job – im off probvation now to).You must be logged in to reply to this topic. If you don't have an account, you can register here.
