A Real Life Property Investment Case Study
Friday, May 7th, 2010
A client, let’s call him “Dave”, called me today to ask where and what he should be buying for his next investment property. Dave wanted to buy a nice flat in the inner suburbs but his budget this time is limited to just $400,000 and the current hot market would restrict his choices. This was my advise to him.
Good question Dave.
Okay, your budget it very limited, so limited that it doesn’t make sense for you to try and get into the inner suburbs because you would end up with a low quality property, probably a tiny 1 bedder.
It would be much better to move further out and buy the right property. One client just bought a great town house for $360K and a strong yield in Frankston South, (this is the good part of Frankston), but you must only look for a townhouse, not a flat.
You can also find excellent properties in Box Hill, Nunawading, Mitcham within a km or so of train station, all good locations, here you need to be looking at 2 bedroom villas rather than townhouses but not a flat unless it’s got some X factor.
What about Other Suburbs?
You will only find 1 bedroom flats in Carnegie, Ormond, Murrumbeena area within your budget, but make sure it’s a spacious 1 bedder, if you feel claustrophobic, don’t buy it.
The property age specification is also very different in the mid outer suburbs from the inner suburbs. If you buy in Box Hill, Nunawading, Mitcham or Frankston look for around the 10 year old market, you still get good depreciation and good value.
You see the further out you go the more acceptable/desirable newer properties become until you get to the fringe, Pakenham, Cranbourne, Mernda, Melton etc where it must be new but then they lose their appeal as faster than a used car because people go there to buy brand new. Depreciation takes on a whole new meaning!!
So, set up alerts for Box Hill/Nunawading/ Mitcham for a 2 bedroom villa/unit and Ormond/Carnegie/Murrumbeena area for a spacious one bedder and then Frankston for good sized, attractive 2 bedroom Townhouse.
Want to Know More?
If you need help with your search or property investment advice give Investors Edge Finance a call on 9509 8911 or email us at info@investorsedgefinance.com.au.
If you would like help with any of the topics covered in this article, call 03 9822 3256 or email us on info@investorsedgefinance.com.au to book your consultation with Investors Edge Finance today.