Hi guys. I am currently deciding between two possible one bed, one bathroom apartments. The first of which is brand new apartment in an 8 apartment complex, expecting $280 pw rent, in west footscray. The other is part of a 80 apartment complex situated in heart of Footscray on Barkly street. Both are valued around $320k.
I am leaning towards the barkly st apartment due to the location and rental return, however I am concerned about long term capital gains, being part of such a large apartment complex.
Any insight into pros and cons of investing in an 1 in 81 apartment complex would be much appreciated. Cheers
Hi and welcome aboard.
If I had to choose either, I'd go for an apartment in a smaller complex over the larger one. With large complexes, you can find yourself competing for tenants and potential buyers if you decide to sell up. A few quick fire sales in the big complex can also cause the value of your property to decline.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
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Hi JP
Good to have you on board.
Wow 1 out of 81 apartments in the block i am not sure that you will get much capital growth if you are competing against 80 other owners in the event that you need to sell the property.
Are you sure you are not paying a premium for a new property.
Often you are better off in buying something existing with a proven rental record or even better an existing tenant.
We are finding a lot of inner city Melbourne properties not coming upto purchase price when it comes to valuation.
There are a lots of alternative options where you can get good yield / an capital growth over time.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I agree completely with the boys.
Additionally I'd encourage you to take a step back and ask yourself what are your objectives. You want to ensure a property takes you closer to your objectives, rather than farther away. For instance, is this property going to cover its own expenses, and if not, how do you propose to purchase IP numbers 2 and 3?
Just saying, you don't necessarily have to choose between the two apartments. You could choose neither, if indeed neither takes you closer to your goals.
Jacqui Middleton | Middleton Buyers Advocates
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Just reiterating what the above posters have advised, you will generally find that boutique apartments in smaller complexes will have better long term capital gain than larger complexes.
Footscray itself isn't that bad of a suburb to invest in, much improved area from what it once was. Just need to do your research and see if it's appropriate for you.
Cheers
Tom
I agree with the other generally I would look at a smaller block. You might want to also look at an older block. There seems to be a move to building smaller apartments today where a block even 10 years old may be larger and therefore may also appeal to owner occupiers which could mean higher growth. However it is also important to look at location as well
Nigel Kibel | Property Know How
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