I am trying to buy an investment property priced around 300k to 400k. It must be a seperated house so the land value would increase over the years. After looking around melbourne suburbs, the options are very limited. All suburbs falling in this price range are low socioeconomic ones. anyone had any experience with that?
any advise would be appreciated.Anthony ZanattaParticipant@azanatta91Join Date: 2016Post Count: 25
Hey Peter, is there any reason that you want to buy in the Melbourne area? Have you considered widening your search to other states which would enable you to choose from a wider range of properties?Corey BattParticipant@cjaysaJoin Date: 2012Post Count: 1,010
Consider that generally lower socio-economic areas have higher rental property ownership than other areas – generally you will find more investors there!
Yields are usually higher and as you’ve noted – lower entry costs which keeps a steady stream of people looking at them as investments. My entire portfolio would fall into the lower socio/working class areas as the numbers stacked up for each purchase, haven’t had any troubles with this.
Azanatta91 has mentioned a good point – you may not want to limit yourself just to metro Melbourne if you feel your budget is constrained. In the 300-400k range that puts you near median capital city prices in some other markets, so you can balance entry price vs perceived risk of an area if you feel low socio-economic areas are ‘risky’.
Hey Peter, is there any reason that you want to buy in the Melbourne area? Have you considered widening your search to other states which would enable you to choose from a wider range of properties?
Hi, Anthony, I live in melbourne and probably will be in melbourne in the near future. But I am more than happy to consider other states if the CG and rental income are promising.
My entire portfolio would fall into the lower socio/working class areas as the numbers stacked up for each purchase, haven’t had any troubles with this.
Thanks for the input. I am looking for the first investment property and there is a lot I need to learn.Tony FlemingParticipant@the-dark-knightJoin Date: 2008Post Count: 396
As others have stated low socio economic properties are not something to be afraid off. You have higher tenant demand, better yields, lower entry price and if you pick right can get some steady cashflow and equity. Plenty of good options in Adelaide, Brisbane and regional NSW areas.Jamie MooreParticipant@jamie-mJoin Date: 2010Post Count: 5,069
There’s nothing wrong with buying in a lower socio economic area providing you’ve calculated the risks involved – and not all socioeconomic areas are the same either!
Generally speaking – if you can land an IP in an area that’s prime for gentrification then you can experience some decent growth. Same deal with some fringe areas of capital cities. Look at West Syd for example – detached houses were selling for low $200’s not that long ago…that’s no longer the case!
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