We are sifting through the hundreds of properties available, and curious to know is it better to look at an outer suburb 2-3 bedroom house rather than an inner city 1 bedroom unit/apartment? (Talking Melbourne)
Depends on the type of 1 bedder. If you are talking a 1 bedder in a highrise, steer clear. There are a bunch more just like it that your 1 bedder will always be competing with for buyers or tenants that will result in one thing. Discounting. Which is bad when you are the owner.
Some people think 1 bedders are always bad. In the right circumstances, they can be awesome. I have some cracker yielding 1 bedders in a regional city. Guess what, they are not in a highrise. Ground floor stuff with no dwellings above them. So the land content that houses enjoy also apply to these.
So in response to your question, I'd take the 2-3 bedder a bit further out rather than the 1 bedder smack in the city.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi Kat and JacM,
You can do a one bedder, as JacM says it has to be in smaller building. But also has to be a true one bedder. There have been some successful renovations where people have created one bedroom units from bedsits, and 2 bedroom units from one bedroom units. It's really about the numbers and what works for you.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeYeah I wasn't too keen on high rise apartment stuff, the one I have found is on a unit, ground dwelling. The only thing is, its unit number 3 of 6 on the block and it looks as though each unit is divided by a wall, so its a common wall. and I am not a fan of having the laundry in the bathroom – but that's my personal distaste.
There are plenty of laundries in bathrooms in the 1 bedder market. I'd compare recent selling prices of similar dwellings to the more modern layouts to be sure I am not offering too high.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
I’ll put my hand up for 1 bedders in low rise buildings as well. Steer clear of the shared laundry scenario.
I like blocks of 1 bed flats on 1 title
Do some number crunching to compare the net return of the house/apartment, with the apartment check out the floor metre size, strata fees, number in the block, condition of the block, scarcity factor to start with.
Problem with 1 bedroom unit/apartments in Melbourne is 2 folds
- Demand is limited to a smaller market such as investors, students, young professionals etc
- Supply is expected to outstrip demand according to BIS Shrapnel’s Inner Melbourne Apartments 2012 to 2019 report
Personally I would not buy an inner 1 bedroom apartment in Melbourne for capital growth, especially if it is negatively geared.
I personally would not buy 1 bedroom apartment, I do not think they are good investment. I always invest in 2-3 bedroom houses or units. Those properties give me the highest cash flow.
The idea is to have your tenancy in the property as long as possible.
Therefore .. the best sort of investment property can be greater than a singular use for the tenancy concerned.
1BRs in the city are facing two major problems. Specification – allocation of only singular subgroups …. and Saturation – there are more one bedders in the city than demand caters for currently.
It would be the same reason why hotel leaseback and aged care facility ownership are off my investment menu. If I want a property to be my investment .. I want to be able to lease to just about anyone. Male, female, student, orangutan. If he's paying his way .. what he is doesnt matter to me.
2 br offer just a little more flexibility in the tenancy as to change of conditions. Having a baby? Then the second bedroom becomes a nursery. Going to university? second bedroom is now a study area. Needing to stay on but cant really afford rent? Sublet out the second bedroom ! Cousin coming to town? 2nd bedroom !
People are too enamoured with the idea that a central Melbourne purchase means continual frequency of demand. Its not necessarily the case .. as it is balanced by an increased and substantial supply for that market.
Your property must meet market conditions and demand. Thats central to it remaining both a desirable property and a longer term investment.
The same criteria would need to be checked for your outer suburb property. How does it meet the market now? Is there currently demand for that market level and type of property? Will your property be in a good position still .. in 5 years?
Ask these questions pre-purchase and save yourself the agony of a poorly thought out invesment.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
