Forums / Property Investing / Help Needed! / Investing under $300k for Cashflow Positive / High Yield property in VIC ?

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  • Profile photo of SiteManagerSiteManager
    Participant
    @sitemanager
    Join Date: 2015
    Post Count: 56

    Hi All,

    As a beginner investor, I’m looking for investing under $300k property for Cashflow Positive / High Yield property in VIC state, it can be any type House/Town House/Apartment, it must be existing one as I do not prefer to buy new OTP or H&L package.

    Where about that you’d suggest me to invest ?

    Note: From Steve McKnight seminar, he mentioned that Ballarat VIC 3350 is one of his property investing location, so I guess he can’t go wrong in selecting the area ?

    SiteManager

    Investing for a better future

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Any reason why it MUST be in Victoria? If you’re chasing high yield, you can find quite a few properties in Adelaide metro for higher yields than regional Victoria – go figure!

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
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    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Agree with Corey – if cash flow is the aim of the game then don’t limit yourself to one geographical location.

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of SiteManagerSiteManager
    Participant
    @sitemanager
    Join Date: 2015
    Post Count: 56

    @jamie-m & @cjaysa,

    Because VIC is the second state with highest median property price plus the migration rate and amenities is already established compare to the other state.

    Source: http://www.melbourne.vic.gov.au/BuildingandPlanning/FutureGrowth/Documents/Understanding_Property_Economics_Drivers_Housing.pdf
    and also this Infographics: http://mccrindle.com.au/resources/Sydney_Vs_Melbourne_Infographic.pdf

    Correct me if I’m wrong, if I look at the property within 15 KM ring outside Melbourne CBD is that make more sense ?

    • This reply was modified 3 years, 10 months ago by Profile photo of SiteManager SiteManager.

    SiteManager

    Investing for a better future

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    The only issue with that is <15km to CBD and CF+ don’t match up in Melbourne generally. There certainly is a strong population growth for Melbourne, whether this translates to the same population growth in regional areas where you might find cash flow neutral/positive is another question.

    Tread carefully and always make sure you weigh up all the factors of an investment – not just the cash flow.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
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    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of P. DonnellyP. Donnelly
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    @pdonnelly
    Join Date: 2015
    Post Count: 3

    I agree with Jamie and Corey. Have you considered international property purchases? In the Asian market you can find affordable properties with high yield and monthly income. Quite a popular trend for foreigners right now from all over the world. And, not as complicated as you might think.

    P. Donnelly | NTI - Nippon Tradings International
    http://nippontradings.com/
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    Profile photo of #Planning Permit#Planning Permit
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    @planning
    Join Date: 2014
    Post Count: 64

    You need to go outside Melbourne- find a block you can subdivide and sell off the new lot to pay down debt or build the dual occ and get 2 incomes to be cash positive. There are properties like this within 100K of Melbourne CBD where rental demand is high- easy to commute to work.
    Property may cost around 200K+. Build cost about $150K+. Rental income about 600/week+

    #Planning Permit | AuArchitecture
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    Property Subdivision expert with 250 planning permits approved by Melbourne Councils

    Profile photo of SiteManagerSiteManager
    Participant
    @sitemanager
    Join Date: 2015
    Post Count: 56

    You need to go outside Melbourne- find a block you can subdivide and sell off the new lot to pay down debt or build the dual occ and get 2 incomes to be cash positive. There are properties like this within 100K of Melbourne CBD where rental demand is high- easy to commute to work.Property may cost around 200K+. Build cost about $150K+. Rental income about 600/week+

    @planning, ok so in that case it is in 100 KM outter ring of Melbourne ?
    Which city or suburb that you can show for example ?

    SiteManager

    Investing for a better future

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
    Post Count: 12,010

    P Donnelly how do Australian residents go for borrowing in Asia ?

    What is the maximum lvr we can borrow.

    Funnily enough we can’t cope with the demand from Asian investors wanting finance to invest in Australia.

    Cheers

    Yours in Finance
    0-40 Properties in a decade. Ask me how.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of SiteManagerSiteManager
    Participant
    @sitemanager
    Join Date: 2015
    Post Count: 56

    P Donnelly how do Australian residents go for borrowing in Asia ?
    What is the maximum lvr we can borrow.
    Funnily enough we can’t cope with the demand from Asian investors wanting finance to invest in Australia.
    Cheers
    Yours in Finance0-40 Properties in a decade. Ask me how.

    @qlds007, Does the foreign investor can buy existing property or does it have to be new Off The Plan ?

    SiteManager

    Investing for a better future

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
    Post Count: 12,010

    Sure but that wasn’t the question.

    Question is how much can I borrow against the property ?

    Cheers

    Yours in Finance
    0-40 properties in a decade. Ask me how.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of jmnes12jmnes12
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    @jmnes12
    Join Date: 2015
    Post Count: 20

    I own close to AUD8mm worth of property in Japan, but unless you’re a resident, or you have a JV partner you can trust on the ground Asian investment properties are generally very hard to get finance for. Typically it’s cash only, or if you’re a premier account holder at HSBC or another global bank equivalent you can get mortgages with preferential rates. However this is getting harder.

    There are plenty of high yield property’s in Aus, and lots of strategies to create cash flow. I wish I had know this 3 years ago when I started my acquiring property in Australia. My portfolio would look a lot healthier!

    Profile photo of Ziv Nakajima-MagenZiv Nakajima-Magen
    Participant
    @zmagen
    Join Date: 2012
    Post Count: 522

    Asian investment properties are generally very hard to get finance for. Typically it’s cash only, or if you’re a premier account holder at HSBC or another global bank equivalent you can get mortgages with preferential rates. However this is getting harder…

    Quite right unfortunately, only exception being international banks, and even then mostly inter-Asian ones like HSBC, Bank of China, etc – not only that, but non-residents also cannot open standard bank accounts for rent deposits, bill payments, etc, so really impossible to do without local representation to cover all of that.

    On the upside though, affordability is far better – you can get positive cashflow properties yielding much higher percentages than in most other developed countries at a fraction of the price (starting at around $25k, so really a minimum mortgage deposit in Aus) – and tenants are very stable, and docile as lambs in the vast majority of cases.

    So, in practice, the price of one average property in Aus can get you anywhere from 4-8 of them here in Japan, which also accounts for better hedging and diversity (one tenant leaving means 12-25% of the income stream stopping, as opposed to 100% in Australia, plus better socio economic and geographical spread).

    The caveat is that this 7-12% net pre-tax yield p/a or so comes at the expense of capital growth potential – the last four years have been kind in major cities here, but prior to that we’ve had two decades and a bit of deflation and price drops (hence the excellent deals that can be found now).

    Ziv Nakajima-Magen | Nippon Tradings International (NTI)
    http://www.nippontradings.com
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    Ziv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
    Post Count: 12,010

    “There are plenty of high yield property’s in Aus, and lots of strategies to create cash flow”

    Precisely, and hence my question why would Australians want to rush out and pay cash for Asian properties.

    I appreciate P Donnelly was trying to spam her wares with her 3rd post of contribution but a little over zealous.

    Most members post a few useful answers before the get into self promotion.

    Cheers

    Yours in Finance
    0-40 Properties in a decade. Ask me how.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of BuyersAgentBuyersAgent
    Participant
    @knightm
    Join Date: 2005
    Post Count: 317

    Hi All,
    As a beginner investor, I’m looking for investing under $300k property for Cashflow Positive / High Yield property in VIC state, it can be any type House/Town House/Apartment, it must be existing one as I do not prefer to buy new OTP or H&L package.
    Where about that you’d suggest me to invest ?
    Note: From Steve McKnight seminar, he mentioned that Ballarat VIC 3350 is one of his property investing location, so I guess he can’t go wrong in selecting the area ?

    Hi @sitemanager to just answer your question for decent yields in VIC without too much risk I would consider Ballart, Bendigo, and Wodonga as viable options. Mildura possibly at least the vacancy rate is tight but I haven’t checked the economy there recently to know what the current vibe is.

    BuyersAgent | Precium
    http://www.precium.com.au
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    South Coast NSW Independent Buyers Agent - Wollongong to Batemans Bay and Regional NSW

    Profile photo of Ziv Nakajima-MagenZiv Nakajima-Magen
    Participant
    @zmagen
    Join Date: 2012
    Post Count: 522

    “P Donnelly was trying to spam her wares…”
    Yours in Finance0-40 Properties in a decade. Ask me how.

    Sorry, Richard, but I’m not sure how exactly mentioning the Asian market (last I checked there were more than a few countries in Asia) is spamming, unless you’re referring to Priti’s signature, which I thought was actually far less of a spam than some I’ve seen here.

    Priti is an experienced investor whose expertise, both personal and business oriented, is shared with a great and many folks from all around the world regularly (last I checked she also had property in India, for instance) – the fact that she’s only joined this forum recently doesn’t detract from any of that, and her mentioning that a great many investors are flocking to Asia, which is absolutely true, doesn’t strike me as any more spammy than someone mentioning that they have a great many Asian clients enquiring about finance for Australia properties.

    Bottom line, it’s all a matter of individual preferences, portfolio diversity and particular criteria – many of our clients have both Australian and Asian properties (Japanese or otherwise, as well as European properties,US properties, etc etc), as I’m sure many of your own clients do as well. As long as the discussion is to the point, and no misleading information is presented (a criteria which I believe Priti’s comment more than fulfilled, she certainly wasn’t the first person to mention geographical diversity in this context), I don’t see why there’s any need for bickering – didn’t peg you as that sort of person up to this point, hope I wasn’t wrong?

    Ziv Nakajima-Magen | Nippon Tradings International (NTI)
    http://www.nippontradings.com
    Email Me | Phone Me

    Ziv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property

    Profile photo of MTRMTR
    Participant
    @marisa
    Join Date: 2004
    Post Count: 663

    I see you are a new investor, I would certainly not recommend investing overseas at this point in time.

    Is Melbourne your own backyard?
    There are strong fundamentals in Melb, highest immigration in Australia for one.
    We have already seen considerable growth in many areas.
    If you are looking at buy and hold house unless you go regional, townhouse or develop, ie build at rear of development site it will be difficult to achieve cash flow positive properties.

    Have you looked at Geelong?? I think this area has been earmarked for major infrastructure in the near future.

    There is still cash flow properties in 17 km ring, west and north, perhaps not as desirable areas but may be worth looking at pockets. I have been developing townhouses in Thomastown close to rail, these will be cash flow positive with depreciation schedule. Around $350K mark, this may/may not suit but it would fit your criteria of cash flow positive and relatively close to CBD.

    Beware that older properties that are slightly cash flow positive they can easily turn into negative because of the higher maintenance issues.

    MTR:)

    Profile photo of jmnes12jmnes12
    Participant
    @jmnes12
    Join Date: 2015
    Post Count: 20

    I would say without any on the ground intel, be it a spouse, relative or someone you can trust there is no point in buying overseas property. I’m based in Tokyo, have an Australian wife, and am Canadian. I have properties in each of those Countries because I understand (to an extent!) the ins and outs of those markets and have connections there.

    That said, my Australian portfolio is suffering the most because I went against the best advice which was to start slow and to pay for worthwhile real estate education. The same strategies that work in other jurisdictions do not always work elsewhere. The success that I have in Canada and Japan has definitely not translated to success in Australia.

    Being a newcomer on this forum I would warn that Australians thinking of searching beyond their international borders take a step back and look what they can do in their own country. Once you employ tried and tested methods for growing your portfolio locally and you have a solid portfolio backing you, you can begin to think about looking offshore.

    Profile photo of Ziv Nakajima-MagenZiv Nakajima-Magen
    Participant
    @zmagen
    Join Date: 2012
    Post Count: 522

    I would say without any on the ground intel, be it a spouse, relative or someone you can trust there is no point in buying overseas property

    Agree completely, once you venture away from home it becomes less about real estate due diligence and more about team due diligence – there’s simply no way to personally handle matters from afar in any efficient manner – putting together the right team who have reliable local representation, expertise and know-how is the main skill set an international investor requires.

    Ziv Nakajima-Magen | Nippon Tradings International (NTI)
    http://www.nippontradings.com
    Email Me | Phone Me

    Ziv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property

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