Forums / Property Investing / Help Needed! / CF+ Melbourne CBD worth BUYING now?

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  • Profile photo of coral33coral33
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    @coral33
    Join Date: 2006
    Post Count: 7

    Hi there

    Anyone who can advise me whether is worth buying a CF+ Melbourne CBD apartment? I know the capital growth won’t be there but it’s CF+ from day 1, all views are welcome. Thank you.

    Best regards
    Sun

    Profile photo of shake-the-diseaseshake-the-disease
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    @shake-the-disease
    Join Date: 2005
    Post Count: 97

    I can’t think of a single circumstance that I would even consider buying a unit in the Melbourne CBD.

    Is scarcity there? No
    Is there a good prospect of CG? No
    Is there good collateral value? No
    Is the income OK? Um, maybe

    That rates 1/2 star out of 4 in my book.

    Profile photo of Fast LaneFast Lane
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    @fast-lane
    Join Date: 2004
    Post Count: 527

    If it can achieve a good amount of CF per annum with little money down, do it. If it’s gonna make $10 per week and it costs a 20% deposit, dont do it, especially with little upside of capital growth.

    CF+ for the sake of it can be detrimental to anyone’s investing journey.

    Profile photo of RikkyRikky
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    @rikky
    Join Date: 2005
    Post Count: 313

    shake the disease you have got to be joking, inner city propertys particularly appartments are at there lowest point in the property cycle , over supply and not enough buys sound like a case of supply and demand , I think shortly the tables will turn. If you can get +cf buy all of them why not.

    We buy properties cash fast settlements no fees no fuss. contact me on 0408 355568
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    Profile photo of depreciatordepreciator
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    @depreciator
    Join Date: 2003
    Post Count: 541

    Ah, don’t you love forums – two completely opposite views.
    Might be time to give a bit more info, Sun. Where exactly are the apartments? What sort of deposit do you need to make them cf+? Are your projections based on a rental guarantee from the developer? Are they serviced apartments? etc etc.
    Scott

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    Profile photo of skippygirlskippygirl
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    @skippygirl
    Join Date: 2003
    Post Count: 127

    I look at the cash-on-cash return (ie. the after tax income you will receive/the $ you had to put in) in order to see if it’s worth it as opposed to some other investment.

    Cheers
    skippygirl

    Profile photo of MooseheadMoosehead
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    @moosehead
    Join Date: 2006
    Post Count: 42

    shake the disease – I wonder if your opinions are backed by your own research or if you are just joining in with the crowd who bash melbourne CBD investing?

    My opinion is that it COULD be a VERY GOOD investment. Reasons being (these are my opinions only of course):

    1. The demand is there. Look at the forecast building starts VS underlying demand forecast by the major economic analysts. There is already a housing shortage in Melb and it is expected to deepen over the next 2-3 years. Sure there has been alot of apartment in/near the CBD but from what I have seen it is being absorbed. It has suffered along with the rest of the Melb market.

    2. There’s plenty of scarcity! I don’t understand how you came to the conlusion there isn’t… CBD land is the definition of scarcity!

    3. Collateral value – provided you choose a quality apartment in a smaller building it would be no better/worse than other RE investments.

    4. Income – probably about on average with what you can (and should) expect from RE investing.

    So coral – there’s another view for you ;)

    Profile photo of bradjebradje
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    @bradje
    Join Date: 2006
    Post Count: 39

    Is there maybe also an opportunity to turn them in to Commercial space in the future? Always something needed in CBD’s of most cities I know.
    Just a thought…..

    JB

    Profile photo of coral33coral33
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    @coral33
    Join Date: 2006
    Post Count: 7

    Everyone thanks for your valuable insight. a few answers here, it’s a commercial converted apartment, so I don’t think it can turn back into commercial but may be so too? skippy, may I know how much and above is a fair cash-on-cash return? thanks again.

    Profile photo of fernfurnfernfurn
    Member
    @fernfurn
    Join Date: 2005
    Post Count: 139

    I have always thought if I had spare cash and could wait it out I would buy into Southbank/Docklands. About 3 years ago (in the real overflow stage – from heresay) you could screw a deal of an apartment for $185,000 around Southbank. I don’t think you could get one for that now, I think if you could still get a real bargain the overflow of apartments cant last forever. I believe they will turn around and become very hard to buy into. Look at the Gold Coast, – they don’t make any more land. Just an opinion!

    Fern

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