Hi, I was looking to buy an investment property in Mernda and to put it on rent. I have heard mix opinions, I was thinking long term, any suggestions, tips?
Thanks
VishalMernda is considered very far out with an abundance of spare landing surrounding it. People won’t be competing to live in Mernda anytime soon. Average deal won’t work out there as an investment.
If you are prepared to look that far out of town, at least Diamond Creek is more picturesque and has established infrastructure including a train line.The only investors who have made a killing out there are the developers that got the land off the farmers for nothing and got all the zoning changed for residential development.
Thank you @soupy. Makes sense, I was also looking at truganina but heard similar things that its cheap because its far.
For an investment I would say no – for PPOR yes – if it suits your needs. Mernda/ Doreen has seen a massive expansion in development with H&L popping up left right and centre – however – my experience tells me they are generally overpriced with huge $$ comms being paid to sellers, particularly when the chinese buy (much like point cook). Further yields are not that great and transport is rubbish.
Better options in my opinion however this will depend on your strategy/ borrowing capacity. What price range are you looking at?
Cheers Ivan
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Developers don’t rarely get land from farmers for nothing and make millions. Unless your name is Facey (jokes).
Do developers typically make between 15-30% returns, yes. Do they risk millions to do this. Yes. Is it the glory business it once was. No.
The biggest winners in development are local council, SRO and ATO.
I personally wouldn’t buy in Mernda as I don’t believe it is well connected to the city and there is a lot of land to come on in the northern corridor including Plumpton, koroit and rockbank all of which is better connected to the city. I think it’s easier to get into the Cbd from wallan which is miles away. For me personally if your to buy developer land for an investment, I’d recommend pakenham, officer and maybe Cranbourne.
Soupy makes a good point though that development land is plentiful which means you’ll be waiting a while for capital growth. That said I have seen scarcity (as a result of planning issues and things like fhog) push prices up quickly in the past.
At the end of the day buying from a developer is buying a solution really so a lot has been take. Off the table. Better to buy the problem and provide the solution as Steve would say.
Sometimes you can find old vacant blocks for sale in older estates where the restrictions on the plan of sub have expired and the lots can be re-subdivided. I am doing this on two lots in pakenham where there was no restriction for subdivision on the lots.
Hope that helps….
Also if you buy direct from the developer (including via one of the big builders) the most the commission that will be being paid is 3% no different to established real estate. That said a builder referral of a couple thousand might be being paid. The only time your paying $30k+ commissions is when you buy through marketing groups (often being referred by your trusted advisor financial planner or accountant).
@redwood I see. Initially I was thinking to buy properties but now decided one at around $650. Any ideas? Also thank you for your help.
@delta82 “Better to buy the problem and provide the solution as Steve would say.” thats so true, now that I have increased my budget to $650 I will have bit more. Thank you for sharing your thoughts, some very useful tips. appreciate it.
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