Hi everyone,
This forum has really been very helpful. I would like to get some information as I’m new to property investment. The plan is to buy, hold and rent/lease.
I have a budget of about 220K to buy an investment property in the Geelong area. I’m looking for good rental yield and I know my budget is a bit tight but do you think it would be wise to get a 2 bedroom house/unit in a not so good suburb (such as Corio, Norlane etc. as it would be bit cheaper to buy) or shall I invest in a 1 bedroom house/unit in a good suburb as I may not be able to get a 2 bedroom unit in a good suburb with my budget of 220K?
Thanks in advance.
Best regards.
AftabAlways extend to where the value lies and dont limit yourself to just what you feel inherently comfortable with.
The longer term answer will be that the house sits upon a larger area of land and the land in time should increase around the base value of the house.
HOWEVER this may not either be the best way for you to invest nor your best return.
Units as such are a lot smaller, a lot less effort to maintain and still produce a good return.
If as you stated your budget is your main concern, then look towards maximizing your return so your earning income becomes the least concerning variable in the equation.
Sum it up, get what you can afford and which puts the least strain on your back pocket. It’s your first buy and at this stage you dont have the flexibility for risk or higher cost investing strategies.
Hm. The tenants you get will do a lot to determine whether it’s a good or bad investment. Can you get good tenants and a good agent if you pick the bad area option? If you can, then good. If not, even with insurance, dealing with a trashed house is likely to be a pain in the rear end. Which option do you think will have more capital gain? How do rental vacancies compare?
Just a few thoughts. Good luck!
Hi Aftab,
Can you draw some ideas from what this young bloke did?
Note that his path had him add Equity to each purchase via a reno – the added equity provided the Deposit/Costs that allowed him to move onto the next property. Without the extra Equity created, his journey would have been nowhere near as quick as it was. Will that work for you too?
Benny
According to me, you should invest in 1 bedroom house/unit in a good suburb as well located spacious one bedroom apartments make great investments and will deliver strong rental and capital growth in the future.
Jodie Kelly | Minus The Agent
https://www.minustheagent.com.au/
Email Me | Phone MeThe Quickest Way To Sell Your Own Home
looking for good rental yield and I know my budget is a bit tight but do you think it would be wise to get a 2 bedroom house/unit in a not so good suburb (such as Corio, Norlane etc. as it would be bit cheaper to buy) or shall I invest in a 1 bedroom house/unit in a good suburb as I may not be able to get a 2 bedroom unit in a good suburb with my budget of 220K?
Thanks in advance.
Best regards.AftabReckon there are too many factors here for a yes/no answer.
If you are looking for a strong rental yield, then that’s a different aim than a strong capital growth play. Rental yield is great for cashflow, capital growth is great for wealth building.
Personally, I like eating the pie and keeping it full 😉
We usually buy a property that needs renovation (so the purchase price is relatively low), do the Reno, increase the rental yield, refinance and let it ride the market from that point.
If I were you, I would also consider the demand for 1 vs 2 bedrooms. Generally speaking, 2 bedrooms tend to be easier to rent as they have much more demand than 1 bedroom.
Hope this helps? 👍😎
Happy new year!
EthanEthan Timor | Aligned Finance Pty Ltd
http://www.alignedfinance.com.au/
Email Me | Phone MeActive Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)
With a budget of 220k you will be certainly limited. It may be worth considering your options in regional/interstate at the same time – there’s no harm in looking at the comparisons. In general try to stick to supply constrained property (ie don’t buy units in an area where they’re building more and more units, or houses in a new estate/next to a new estate if theres new supply coming on, it just floods the area and reduces growth potential).
I’d much prefer 2 bedder investments than 1 bedder any day – it appeals to a slightly larger market than 1 bedders, but houses always trump units.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Thanks Ethan, I am looking for a 2 bedroom apartment. What would be the best source to find a property that would require some renovation and of course find a house below the market value.
With a budget of 220k you will be certainly limited. It may be worth considering your options in regional/interstate at the same time – there’s no harm in looking at the comparisons. In general try to stick to supply constrained property (ie don’t buy units in an area where they’re building more and more units, or houses in a new estate/next to a new estate if theres new supply coming on, it just floods the area and reduces growth potential).
I’d much prefer 2 bedder investments than 1 bedder any day – it appeals to a slightly larger market than 1 bedders, but houses always trump units.Yes, I am looking for a 2 bedder, it is a wise investment long-term. I reckon 2 bedroom house has a better scope but would be a bit pricey compared to a 2 bedroom unit.
In general try to stick to supply constrained property (ie don’t buy units in an area where they’re building more and more units, or houses in a new estate/next to a new estate if theres new supply coming on, it just floods the area and reduces growth potential).
units.I live in Melbourne and targeting Geelong and Ballarat. The land seems to be plenty in those areas and the houses don’t seem to be in scarce as they are lining up with the population growth. Would you be able to suggest some areas with supply constraint?
Thanks Ethan, I am looking for a 2 bedroom apartment. What would be the best source to find a property that would require some renovation and of course find a house below the market value.
We found all our properties on realestate.com.au although I know others found great deals off the market by doing letter dropping (“want to sell your house?”).
Good luck! 👍😎
Ethan Timor | Aligned Finance Pty Ltd
http://www.alignedfinance.com.au/
Email Me | Phone MeActive Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)
I agree with @ethan Timor. realestate.com.au and domain.com.ay are the sources to find a property.
Jodie Kelly | Minus The Agent
https://www.minustheagent.com.au/
Email Me | Phone MeThe Quickest Way To Sell Your Own Home
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