Hi All,
I am fairly new to investing in property and am unable to decide as to what would be a better investment decision over the next 5-10 years.
1) Buy a 3 bed home further out of the CBD. 25 km from melb cbd (Craigieburn)
or
2) Buy a 2 bed unit within 15 km from melb cbd.(Bundoora or Epping)I am aware generally speaking houses do outperform units due to the greater land component. However in craigieburn there is a lot of supply of land as it is a new estate. In Bundoora and Epping you cannot buy blocks of land to build anymore and it is closer to cbd.
Given the above, is the trade off for less land in a better location a good decision? Or am I better off going for a house with more land in an area which I know is growing due to a lot of first home buyer purchasing?
Any help or insights on the above would be appreciated.
Cheers,
Mav
Good day,
Welcome to the forums. Unfortunately I don't know either of these areas well, but I thought to give it a crack and offer two cents worth in case it is helpful to you. I'm assuming you are going to solely rent the place out rather than live in it (or plan to live in it at some stage).
Logic says to go for land since they're not making any more of it. However you're right in saying that there's still much land in supply at Craigieburn. The other thing to consider of course is location and proximity to amenities, and other suburbs that are either popular, doing well, or attract the kind of owner-occupiers (or tenants) that you prefer to deal with. Is the price the same for both areas and do they rent for the same amounts or otherwise similar yield?
Personally, I would go for Bundoora. Is there an RMIT campus there which you can buy near to? Bundoora is neighbour to popular suburbs like Watsonia (which has had a very high auction clearance rate in the last quarter). It is in an arguably more established area with more limited land supply and appears to be closer to amenities. However the thing I have against Bundoora is the lack of a train station. It's nearer the Ring Road however.
If you're going to move in and live there at some stage, have you thought about whether you would like to live there yourself?
Hi fword,
Thanks for your response.
The above scenario is for investment purposes. The prices will be similare however the yield in craigieburn will be higher as it will be a 3 bedroom house rented.
Bundoora ticks all the boxes in regards to amenities ( 2 unis, tram, ring road, neighbouring suburbs reservoir, watsonia)
Craigieburn however is growin extremely rapidly due to first home buyers. There is a new shopping complex which they have plans to build also.
Is there any other information I should be looking at to help with my decision?
mav86 wrote:Hi fword,
Thanks for your response.
The above scenario is for investment purposes. The prices will be similare however the yield in craigieburn will be higher as it will be a 3 bedroom house rented.
Bundoora ticks all the boxes in regards to amenities ( 2 unis, tram, ring road, neighbouring suburbs reservoir, watsonia)
Craigieburn however is growin extremely rapidly due to first home buyers. There is a new shopping complex which they have plans to build also.
Is there any other information I should be looking at to help with my decision?
Good day.
Is the shopping complex in Craigieburn definitely going ahead? They might already have a shopping complex there but I just don't know the area well enough. A few months back I remember reading an article in the Herald Sun. There were residents in the area that were unhappy about the big plans made to build amenities that never truly materialised. Hopefully somebody who lives in the area can comment.
Do consider that if Craigieburn is hot with first home buyers, it'd also be the first to cool when interest rates go up. The interest rates have started to bite a lot of home owners, and as you can imagine, first home buyers are the most likely to feel the pinch first and be forced to sell up. The other thing to consider is vacancy rates. These can be found at the SQMResearch website. In this case Bundoora is high at 8.7% whereas Craigieburn average at 4%. Lower is better in this case.
Regardless of which area you choose, take a drive around to see what the place is like. I've said this before elsewhere, but if you see one overgrown lawn/ nature strip after another, and with an old bomb or wannabe sports car parked on the said lawns, then I'd be more careful about buying into that area. It may demonstrate that the place is either full of renters or otherwise owner occupiers who really couldn't give two hoots about maintaining a sense of house pride.
House pride is an important thing in my opinion. If the area is generally well kept and charming, it will attract people who enjoy the peace and likewise will probably fit in and keep it neat and peaceful. If the area looks like a rat's nest, it'd only attract more rats. Of course, given the time most areas polish up and become expensive, but when you're buying in the outer ring suburbs the supply is that much greater and it'd take way longer for places to 'polish up' than places in the areas closer to the city.
Why not consider buying in Watsonia itself? Why Bundoora and why Craigieburn? Just curious, that's all.
G'day,
I am preety sure the shoppign centre is goign ahead but not 100%. Could confirm at the council.
Given this is my first property I can afford to buy a 3 bed house incraigieburn and I am familiare with the area as many freinds and family live there.
Bundoora is probably the closest suburb to the CBD that I can afford on this side of town. That is a 2 or 3 bed unit.
I like the fact it is surrounded by quality suburbs, good schools, uni etc etc.Craigieburn is cheap and experiencing growth at the moment.
I feel as though bundoora is the best option as it is without a doubt in a better location. It's just a questions of do you go for the 3 bed home or the 2 bed unit.
Dont know much about Watsonia but I will have a look into it. what does it have above Bundoora?
Hi, I don't know the areas at all but a few questions.
When you say Craigieburn is cheap and experiencing growth do you mean growth in price or growth of the area? Is the whole area a new estate? How do the prices compare to surrounding areas?The reason I ask is that there are a few new estates popping up in Sydney which look lovely and seem cheap because it looks so damn nice but next door are properties at half the price.
How much area is left? I n 3?years time when they build the next estate what happens to yours? Will it seem cheap then compared to the new ones?
Unfortunately it's not as simple as unit vs house. I have units and houses some have done very well others average but it's not divided by unit/ house. The houses have better yield but that's due to improvements made.
Also is there opportunity to buy under market value? I like to buy under market value that way you are ahead from the start instead of "hoping" it will rise in value.
mav86 wrote:G'day,
I am preety sure the shoppign centre is goign ahead but not 100%. Could confirm at the council.
Given this is my first property I can afford to buy a 3 bed house incraigieburn and I am familiare with the area as many freinds and family live there.
Bundoora is probably the closest suburb to the CBD that I can afford on this side of town. That is a 2 or 3 bed unit.
I like the fact it is surrounded by quality suburbs, good schools, uni etc etc.Craigieburn is cheap and experiencing growth at the moment.
I feel as though bundoora is the best option as it is without a doubt in a better location. It's just a questions of do you go for the 3 bed home or the 2 bed unit.
Dont know much about Watsonia but I will have a look into it. what does it have above Bundoora?
The familiarity you have with Craigieburn may factor strongly with your decision to buy something there. Local knowledge is valuable and it's great that you know the place well. Friends and family may be able to advise to any new developments that are occurring in the area or planned for the future. They can also collect the weekly local newspaper for you to read about the area.
The 3 bed house vs 2 bed unit decision is a little more complex when we start to consider the kind of tenants you're catering towards. If the drawcard of Bundoora is going to be the schools, then you'll be looking to attract families with kids, which may mean buying a 3 bed home (at least, and 4 bed if possible) over a 2 bed home. All this is in theory however and the depth of the pocket still decides what you should buy.
Watsonia has a train station, pretty important with the rising petrol prices. Although to be fair, prices of tickets are rising too! Based on results at SQMResearch, the vacancy rate is also lower, meaning it could be easier to rent a property out in Watsonia compared to Bundoora. Do check your private messages, I'll be dropping you a mail soon.
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