Hi
I am looking at buying my first property which is going to be a future investment. As I am new to this I was looking for advice when tackling a few choices: As my first investment money is tight and I am looking at buying a unit. These are some decisions I need to make
Good suburb/location close to train line/beach/shops however outdated externally and internally.
Verses
Average suburb/close to shopping centers/approx 20kms inland from beach and modern interior and exterior.
I have been told that when purchasing a unit be sure to take into account the other units as their value will either increase or decrease yours. (Much like buying the worst house on the best street) Also the reputation of a suburb is extremely important to ensure the property's value will increase steadily. Is this all true?
Furthermore buying a newer unit comes with a higher confidence that there will be less or nil maintenance, however, the rental return will decrease as the area isn't as sort after.
So what is more important? Buying a newer unit in a average suburb opposed to an out dated one in a good suburb?
All input would be appreciated
janeashley wrote:HiFurthermore buying a newer unit comes with a higher confidence that there will be less or nil maintenance, however, the rental return will decrease as the area isn't as sort after.
This is a huge assumption and one that generally comes back to back you. The thing with new development is that the strata starts at 'x' but as it is a new development the strata increases rapidly from the 12 month stage.
Regards
Shahin
TheFinanceShop | Elite Property Finance
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Also why units and why not a house? Are you doing the cashflow analysis on each property to determine the net operating costs?
Regards
Shahin
TheFinanceShop | Elite Property Finance
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Hi there,
If you are a beginner at property investment, you should put safety first and consider a property with a low level of risk. I believe that it is essential that you find both a suburb with growing potential, as well as, a quality unit. In case your finances are limited, a good strategy is to buy off the plan. In this way, you make no compromise concerning location and quality. Find a reputable builder to make sure the development is delivered on time, and also investigate the defect clause period.
Darwin with its suburbs it is the perfect place to invest in, being a real estate hot spot. The presence of key economic drivers such as billion-dollar gas and mining projects, tourism, and defence ensure massive capital gains. As for the suburb, I recommend Nightcliff, as its Darwin's most crowded and popular suburb close to all amenities you mentioned in your post.
Cheers,
Emil
Hi Jane
Firstly you need to be assessed to see what you can borrow
Secondly do your research carefully. In my view I would look at where you can get the best capital growth. Now I am based in Melbourne but I think inner city Brisbane is a good place to buy at present. I think it is undervalued and is likely to go up over the next few years
Nigel Kibel | Property Know How
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Hi Shahin
I am now looking at houses as the return as a rental will be greater value. I haven’t looked at the cash flow analysis but i will do now. Thankyou for you advice.Hiya Jane
Not sure if it helps (and it may be a bit outdated now) but there's a spreadsheet on our website that you can punch numbers into that will give you an idea of the holding costs. Don't let it replace your own due diligence or advice from other professionals such as accountants.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
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I would not recommend buying off the plan if your finances are limited. You might find yourself in a situation that you have paid your deposit without the ability to settle on the loan when it comes due. You also have to consider if buying a brand new off the plan unit is financially a good thing. If you think about a chain of money and where does this property fit into it. You've got the land owner making a profit, the developer making a profit, the builder making a profit, the real estate agent making a profit and now your last… to make a profit, if any and only by capital growth which may or may not come as you could never add value to a new unit.
wilko1 wrote:I would not recommend buying off the plan if your finances are limited. You might find yourself in a situation that you have paid your deposit without the ability to settle on the loan when it comes due. You also have to consider if buying a brand new off the plan unit is financially a good thing. If you think about a chain of money and where does this property fit into it. You've got the land owner making a profit, the developer making a profit, the builder making a profit, the real estate agent making a profit and now your last… to make a profit, if any and only by capital growth which may or may not come as you could never add value to a new unit.Good post and I agree.
Particularly in the current environment – OTP can be quite risky, especially if you have limited funds to contribute to the purchase.
OTP does have its place. In a rising market, some investors willing to take the risk have done ok. This was generally the case in Canberra a few years back. Now – a lot of developments are going up. The supply is outstripping the demand and prices are adjusting accordingly.
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]
I am assuming your investment monies are tight due to lack of savings or equity so i wont comment futher there.
Personally i wouldn't buy a unit due to the higher holding costs (Unless of course you buy the entire block but that is a different matter) as i can think of several excellent suburbs where you could pay a similar price to a cheaper unit and get the added benefits of the land.
More than happy to run you off a cash flow analysis on any property you look as we use a specific software which i like for my own property acquisitions.
Try and educate yourself talking to like minded investors in your area or engaging the services of a professional.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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