Hello all
I am looking to buy my first investment property in Melbourne which i can capitalise on the rental,
I have a budget of roughly $180,000 I will not be borrowing any money from the bank.
This price point introduces apartments such as small owner occupancy studio apartments, student accommodation and serviced hotel apartments.
Each of these options produce good rental and in most cases secure rental.What would be the pick of the bunch? At this stage i am looking at Carlton, I have seen one apartment at 570 Lygon Street Carlton ($160,000 rented for $1450 per month which is managed by the YMCA although it is possible to owner occupy this building is mainly rented by students, otherwise the other options would have to be student accommodation otherwise leased apartments by Quest and so on.
Your feedback would be very much appreciated
Regards, Luke
Hi Luke
If you do a search for serviced apartments, studio apartments, etc you'll quickly see that they're not the favored property type for many on the forum.
Are you only in it for the rental yield and care little about the prospect of capital growth?
Any reason why you're purchasing it outright? Have you considered leveraging the money differently?
One of the good things about property investing is the ability to claim costs incurred by the investment against your income – the interest on the loan payments being one of them.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Here is my $5 bet to you
You can take ANY student property in the CBD, good .. bad .. or ugly. Come back to me in 10 years. Thats enough time for it to have proven itself as an investment. Barring inflationary pips to push it along .. it will have done absolutely NOTHING.
Am i only offering a $5 note on that? Lets make it more a realistic bet .. lets call it $7000
As of 2012 .. i've watched some of these student investments across town for just over 10 years. So I'm pretty confident i'm going to win that bet.
You can make good choices .. and bad choices in real estate. But delegating management to a property management company for a transient group of tenancies for a property thats small sized and relies on being a fashion statement to bring in the students, well .. thats just ASKING for trouble.
Frankly you point again proves to me that people do not do anywhere enough due diligence when it comes to investing.
Firstly if you have $180,000 why would you not borrow?Also I agree with other comments here, student accommodation is not a good investment. Who is your resale market, other investors therefore resale is always limited.
I think you should seek advise and at least do some more research before you throw your money away.
Perhaps you could look at property development?
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
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Hi 888LD,
Why not regional? Why not outer suburbs? Why not a house? I can understand wanting to pay cash, but there are plenty of other options out there, you can get some great cashflow + houses at the moment if you don't want pretty or inner city/suburbs. I have a great house (shack) that we reno'd recently and we put the rent up by $60 p/week. There are some great regional Vic towns starting to happen at the moment. Keep your options open, plenty of other great properties out there that don't have huge management fees, poor capital growth and restictive owners conditions!
Good luck, look around!
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeUnfortunately due to my age and time in my job I have been unsuccessful in finding a bank willing to lend me money despite a large enough deposit. Theirfore the only option I have is to purchase outright if I want to buy an investment this year.
I appreciate your feedback, definetly very useful, I will try and search for real estate in regional Victoria as well.
Regards.
I understand your situation, in fact I just had to supplement a cousin that was in exactly the same boat.
She had a clean credit record .. unfortunately not enough income on the books to register more than a 15k property loan in total. That wont even buy you a motorboat.
So she had a cash windfall of around 100k that came to her all of a sudden. She needed to spend it wisely and I suggested getting into a property situation. She felt bad because she couldnt borrow so therefore she couldnt buy anything. The fact that fixing up her situation with a fulltime job .. didnt register. She went through the motions too of looking for places that didnt provide any real degree of either property safety or security. I promised her that I wouldnt MAKE the decision for her .. i would tutor her as to what was a reasonable decision and why. We eventually came up with an acceptable compromise.
Sum it up .. she eventually purchased two well placed units in a decent large country town. She didnt have the full amount for both of them so she requested a small private loan from her mother to fix up the difference. So, as far as the banks were concerned in the end .. she had two properties at 100% and about 15k rental income gross from this 'patched up' deal.
Nine months later .. (as i promised to her at the time) she went to the bank with her 100% ownership of the properties and her current situation. The banks turned around and offered her 180k as a loan. With this .. she went ahead and purchased more property.
She now has four units in a country town .. and a rough income from rentals at about 30k. And a loan from a bank (she had equity), and income leftover from the deal. Not bad for a lady who nine months earlier could only borrow 15k in total !!!!
The deal you make .. has to be a smart deal. And it has to be a deal that provides you with ongoing wealth for the longer term. An INVESTMENT .. (the dirty word that it is) is a gearing for the betterment of YOUR future, not a property manager .. property consultant or accountant. And on that you have to make better choices.
Hi Luke
I am trying to finance a property for a forum client in the same building and whilst this client has good income / assets etc the valuation is ugly in the terms of the lease conditions.
I would suggest you run a mile from this property even if you are paying cash.
On a separate note i would always suggest some form of gearing and in most cases some financing is available.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
As I mentioned you should consider putting your money into a develop project. If you are interested I would be happy to talk to you about the process
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
That would be fantastic how can i contact you, Regards
Sure Nigel wont mind me posting his contact details:
Mob: 0412 345 735
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
hmmm 180k and what to do?
Pair up with a friend and but a duplex in a cheaper suburb rent both out on seperate leases to tenants you screen thoroughly and are long term. I did this with a friend and basically the tenants covered the mortgage and stayed for 4 years. I know the market has changed but it allowed me to sleep a lot easier at night knowing we had them there.
I know it’s all about making money on your investment but there’s different ways to do it and for mine, I would rather make less but have less hassles.
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