Forums / Property Investing / General Property / investing in new estates

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  • Profile photo of Tom017Tom017
    Member
    @tom017
    Join Date: 2011
    Post Count: 17

    Hi

    I have been looking at a new master planned estate at Armstrong creek near Geelong. It has been approved for a lot of infrastrucure development over the next couple of years including schools, shopping centres, freeway link to Melbourne etc. My question is – Is investing in new estates riskier than existing suburbs? How do you estimate rental yeilds without a history?The house and land packages are reasonably priced and i feel have potential for capital growth with Geelong performing quite well.

    If any one has experience or opinion about investing in new estates as apposed to established suburbs i would love to hear from you.

    Thanks for your time.

    Profile photo of bardonbardon
    Participant
    @bardon
    Join Date: 2004
    Post Count: 557

    Nothing wrong with new stock but there are some problems with it. Normally it is better to invest in existing stock for price purposes, yield and market force reasons. New stock doesn’t tend to have forced sellers and the prices remain uniform for a long time. I have one of these .

    Rebecca Harrison
    Participant
    @rebecca-harrison
    Join Date: 2016
    Post Count: 8

    Hi Tom,

    Did you invest in Armstrong creek?? and if yes how is it going seeing this post is 4yrs old.

    I am looking myself at investing now with house and land package for around 400,000 on a 400 block.

    Thankyou
    Rebecca

    Profile photo of JerryJerry
    Participant
    @jerry_o
    Join Date: 2013
    Post Count: 46

    Hi @rebecca-harrison

    You would probably encounter the same problem they have highlighted above.
    Lack of data to compare rental yield history and one of the things that I hate about it is the shortfall in valuation of the property once built. Mainly for the same reason, lack of comparable sales around the area given that it is a new estate.
    House and land packages could work very well for you if you know the market really well. There will be a lot of research involve though and also verifying those data that you have been researching is another factor to consider. Another problem is the price of the property stays stagnant for a few years as mentioned by bardon. Without knowing much of you situation and what you are trying to achieve, try comparing the numbers with existing properties and go back and compare it to your house and land planned purchase.

    Cheers,
    Jerry

    Jerry | Mortgage Station
    http://mortgagestation.com.au/
    Email Me | Phone Me

    Finance Strategist - Active Investor - Serving clients Australia-wide - Based in Sydney / Melbourne

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