Would you buy a 1 bedroom apartment as Investment Property?

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• • 

    ymmf on 10/01/2023 - 08:04

    Would that be a problem for people who are in their 40s/50s when their remaining working life is limited, and therefore the IO loan may not be forever renewable?

    • 

      Chong on 10/01/2023 - 12:55

      +2

      Yes, 100% IO loans only make sense if you have the income to pay it that is not salary. Imagine the stress each time interest rates goes up or rental goes down unexpectedly.

      You should always do your calculations and ensure you are happy with the amount of risk you are taking.

      • 

        ymmf on 10/01/2023 - 14:10

        +1

        I know someone who used equity in PPOR to 100% fund an IO 1mil+ loan for an IP, on top of existing IP loans for several apartments all negatively geared. I think it's similar to the debt recycling strategy as @ZloyKrys has mentioned. I assume the only way for them to profit is for property price to go up substantially over the long term (less the negative cash flow despite the tax deduction, and other outgoings that they may not realise).

        • 

          Chong on 10/01/2023 - 14:24

          +2

          @ymmf: Only that works is that the others are negatively geared but cashflow positive. I would hazard a guess the rest are probably closer to 70%

          for every million dollar loan at Investment property rates, this cycle of interest rate rises alone will have gone up by 30k a year. Not sure what kind of rents you think a million dollar property can raise by to cover that. IP rental rates generally between around 5% gross, minus other costs and considering long term target of cash rate is around 3-4% for a healthy economy, the property will require top up.

          It could maybe work in small windows or if you buy in boom regions at the start of their cycle… over extend with that strategy at 100% and one bad guess and you are sunk, not something i would personally do in my late 40s onwards.

          everyone should do their maths and be happy with the risk they are taking

          • 

            ymmf on 10/01/2023 - 23:54

            @Chong: Absolutely. And I highly doubt properties in Sydney/Melbourne can yield 5% gross at the current price. I cannot understand the financial rationale to buy IP in Sydney/Melbourne at the moment, but maybe I'm very short-sighted.

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  Muimuimorris on 09/01/2023 - 09:54

  +3

  I will be brutally honest because the changes to the residential tenancies act have made me shift my opinion about owning investment property. My investment properties are well maintained through the year, but honestly our tenant arranges maintenance on even small things and I get the bill. It sucks because our perceived income just becomes less and less because of matters that are controlled by the tenant. I'm not saying to shirk responsibilities with maintenance. Normally I get a list together for our trusted trades to do in bulk following the periodic rental inspection report (bi-annually), and that is usually cheaper to do because the labour is on site already for known upcoming work. I literally get drip fed individual maintenance items through the year and that results in totality a bigger maintenance bill than anticipated. I agree with everyone else who said to hammer the home loan for your primary home. This will give you mental freedom.

  • 

    JimB on 09/01/2023 - 13:58

    +9

    Why is the tenant arranging maintenance?

    Shouldn't your agent be managing it and getting your approval before repairs/quotes are approved?

    • 

      netjock on 12/01/2023 - 09:12

      When things need to get fixed they get expensive. Tradies can go for $800 per day before materials. If your rent is $500pw then basically 2 weeks rent disappears in one day.

      • 

        JimB on 12/01/2023 - 10:00

        I don’t disagree but if the tenant isn’t paying for the repairs why would they worry about finding the most reasonable quote?

        Sometimes I fix things myself.

        Eg. Tap leaks, I’d change to a ceramic disc spindle myself. Or mixer tap leaks, I’ll replace the cartridge myself. Replacing sacrificial anode for preventative maintenance.

        I’m sure if the tenant found a plumber it wouldn’t be the cheapest plumber either.

• 

  ZloyKrys on 09/01/2023 - 10:04

  +10

  OP, you'd need to do a thing called debt recycling. Put that 300k into YOUR mortgage, so you reduce the non-deductible portion of after-tax outgoings. Then get another mortgage for the investment property using the 300k (or, better, less, to satisfy the 20% deposit and around 6% of purchasing costs of conveyancing, and stamp duty) equity in your principal place of residence. You'd have the same mortgage but the new one would be tax deductible if you buy an investment with it.

  Now, as everyone else said if you invest in property your key focus should be land to asset ratio. A good rule of thumb is that percentage should be circa 80% or more, so you'll get the maximum capital gains from land appreciation. In apartments, it's so bad that it might be 5-10% tops plus you have a lot of running costs with strata, and levies and you typically won't go far with this type of investment, especially in suburbia. Even in the CBD it's a basket case. If you don't believe me, check these examples:
  https://www.realestate.com.au/property/unit-307-120-studio-l…
  https://www.realestate.com.au/property/l16-unit-162-8-waters…

  Considering the above, you are more likely to get capital growth and lower running cost from a standalone house in gentrifying areas like Noble Park North or Dandenong North (picked those just because you've been looking in those areas), it's still possible to get a standalone house that does not need work for 600-700k in those areas. However, if you live in Victoria yourselves, you might want to consider engaging a buyer's agent in places like Adelaide or Brisbane as the same amount of dollars might get you a better land or house AND you will not be liable for a large annual land tax in Victoria - unfortunately, Vic disincentivises people to invest in their own back yard - every additional property in Vic will increase the land tax and even your PPR is exempt, it's still valued and contributes to the higher tax of the investment. Something to ponder upon.

  • 

    ForkSnorter on 09/01/2023 - 10:43

    +3

    My cousin made the same erroneous argument to me several years ago.

    I wanted to buy in a particular area because it was cheap, and nice. He looked at the price history and said: prices haven't risen for 10 years, that means it's a bad investment.

    He was wrong. The fact that prices were low meant it was a GOOD investment. Over the next 3 years, prices in that area doubled.

    I should have trusted my instinct and bought while prices were low. That would have been a good buy.

    Buying while the price-to-income ratio is at an historic peak is irrational. Buying while prices are low is rational.

    • 

      ZloyKrys on 09/01/2023 - 10:59

      +2

      The prices in the CBD don't go anywhere because there is no scarcity of apartments. Next year, there will be a newer and better tower built across the road, while the old ones, well, will continue to deteriorate, lose the builder's warranty and get on further levies for rectification of shoddy work, ruining the cashflow. There is literally no driver for capital growth in apartments other than inflation and the general market tide that lifts all ships including absolutely crappy ones.

      • 

        ForkSnorter on 09/01/2023 - 11:25

        Buying an apartment is probably better if you're purchasing to live rather than as an investment.

        My friend bought an apartment in the city a few years ago. He did his research and bought an absolutely beautiful apartment with an incredible view while prices were low, cost him a third of the price of a house in a boring suburb. He's paid it off already, only has roughly $150 outgoing costs per week (including body corporate, city rates, water and insurance), has a heated lap pool/gym he can use anytime for free, and an enviable lifestyle because he can walk to absolutely everything the city has to offer, and has a myriad of public transport options at his fingertips.

        • 

          ZloyKrys on 09/01/2023 - 11:27

          @ForkSnorter: It's fine, but the OP is looking to invest, what's the point of subsidising someone else's lifestyle and getting no return, why do this with your money

        • 

          serpserpserp on 09/01/2023 - 17:51

          +2

          @ForkSnorter: Well the pool and gym aren't technically free.

          • 

            ForkSnorter on 10/01/2023 - 07:28

            @serpserpserp: Nearly free. Cheaper than a monthly pass to pool and gym. And definitely cheaper than running/maintaining a lap pool in your backyard.

        • 

          Quantumcat on 10/01/2023 - 00:04

          @ForkSnorter: I think buying an apartment to live in is a really bad idea,since if you get a crappy neighbour you're just stuck with them and they have the ability to really ruin your life if they want to. It could be a bad time financially to sell and buy a new place, but if you wait until a better time, then that's more time you are stuck with terrible neighbours.

          Whereas if you rent it isn't that much trouble to leave and the financial penalty is much less. And if you're willing to wait it out until the end of your lease, then there's no financial penalty.

          • 

            ForkSnorter on 10/01/2023 - 07:25

            +1

            @Quantumcat:

            I think buying an apartment to live in is a really bad idea,since if you get a crappy neighbour you're just stuck with them

            You’re right, but this applies equally to houses. Bad neighbours are everywhere, unfortunately.

            • 

              mousie on 10/01/2023 - 09:38

              @ForkSnorter: Just ask Tracey Grimshaw… oh wait, you can't

            • 

              Quantumcat on 10/01/2023 - 10:23

              @ForkSnorter: With houses you don't share walls, floors and ceilings and the sides of your balcony, and there's only two neighbours that are reasonably close to you, with an apartment there could be half a dozen or more that could impact you badly as they're so close (the ones above and below, and the neighbours of your neighbours).

              • 

                ForkSnorter on 10/01/2023 - 10:50

                +1

                @Quantumcat: Depends on the type of apartment (the ones that appeal to wealthy retirees are generally very quiet), and the quality of the building (e.g. thickness of concrete slab between floors).

                I lived in a high-quality 1980s apartment for 12 years, and in that entire time I only had a noise problem once, in the middle of the night, when some short-term 25-yr-old neighbours immediately next to me had a major party that included some kind of game that involved people dropping heavy objects on the floor.

                That's not bad for 12 years. Much better than listening to dogs yapping all day for 12 years, or road noise.

      • 

        netjock on 12/01/2023 - 09:15

        The prices in the CBD don't go anywhere because there is no scarcity of apartments

        Partially true. With higher interest rates and collapse of big builders (probuild) there is almost no CBD developments in the last year. A shortage might eventuate.

        Don't forget there is only so much land in the CBD that is why they build up. Cost of building is also going up.

        If you can't afford a $1m house and you don't want to get turfed out every 12 months or get a whooping rent increase what do you do? Buy $400k apartments you can afford for now. Keep saving and trade up.

        • 

          ZloyKrys on 13/01/2023 - 22:34

          @netjock: Yep sure there is market dynamics there but this shortage will be just because the market adjusts, there is very little fundamental scarcity in this market, so eventually stock will be built again, easy to do with units. As there is no way to produce any more standalone houses in a built-up suburb, no matter what is the mortgage rate or how financially sound are the developers.

          However, if I had a choice to rent or buy a unit, as a first step, I would definitely buy, and I did exactly that 20 years ago. I would still rather pick up a 3 br villa in a middle ring suburb on 300-400 sqm patch that needs work but with solid bones, rather than a shiny one bedder in the CBD

          • 

            netjock on 13/01/2023 - 23:06

            @ZloyKrys:

            I would still rather pick up a 3 br villa in a middle ring suburb on 300-400 sqm patch that needs work but with solid bones, rather than a shiny one bedder in the CBD

            $600k vs $300k you are not comparing apples with apples.

            there is very little fundamental scarcity in this market

            Really? Why are rents going up double digits?

            • 

              ZloyKrys on 14/01/2023 - 09:22

              @netjock:

              $600k vs $300k you are not comparing apples with apples.

              My bank would not finance anything below 50 sqm in size and even CBA who do 45sqm needs 70% lvr tops, so really anything that is new/relatively new above 50sqm in the Melbourne CBD is $450-500k now, look it up.

              Now, the gap becomes a bit different.

              Surely you can find a 300k 1 bedder, no doubt, but it doesn't always mean it can be easily financed, may need work or have upcoming levies or other strata issues. The point I was making about a new apartment vs. an old villa.

              Really? Why are rents going up double digits?

              The same reason why it goes up for houses. Supply and demand. When you buy, your horizon for investment is 10+ years, due to the high transaction costs. In 10+ years, there will be many more new towers built, and it's given. Melbourne has the enormous Fisherman's bend alone to redevelop, and it will pack gazillion of apartments, all new and shiny. Rental market, just to state it, was falling for a couple of years and just recovering, plus due to the new rental laws a lot of investors sold, so the service is not as widely available as it used to be.

              • 

                netjock on 14/01/2023 - 16:46

                @ZloyKrys:

                Melbourne CBD is $450-500k now

                Stay on topic. OP is buying in the suburbs. 1 BR don't compare it to your 3BR house.

                You're not comparing apples with apples.

                Melbourne has the enormous Fisherman's bend alone to redevelop

                The same white elephant as southbank and docklands. It also isn't the CBD. You start shifting and trying to pretend CBD, suburbs are the same.

                • 

                  ZloyKrys on 14/01/2023 - 16:55

                  @netjock:

                  Stay on topic. OP is buying in the suburbs. 1 BR don't compare it to your 3BR house.

                  I literally told you what I would do, not the OP, try to re-read this thread. Since you've decided to respond, you either stick to the topic or ignore my response. Or post your own thread which I might decide to respond to or not.

                  The same white elephant as southbank and docklands. It also isn't the CBD. You start shifting and trying to pretend CBD, suburbs are the same.

                  That's totally BS response, both Docklands and Southbank are the integral part of the CBD, it's not just the Hoddle grid

                  • 

                    netjock on 14/01/2023 - 16:59

                    @ZloyKrys: I spoke specifically about CBD it is your who dragged the suburbs in thinking you are some kind of expert.

                    That's totally BS response, both Docklands and Southbank are the integral part of the CBD, it's not just the Hoddle grid

                    Yeah sure. That is why they don't have a 3000 post code. You are really stretching the truth aren't you.

                    • 

                      ZloyKrys on 14/01/2023 - 17:01

                      @netjock: Sure, what I know, I have only been investing for the 20 years, what's the point arguing with the resident postcode expert, lol

    • 

      Longtimescroller on 10/01/2023 - 18:46

      +1

      Totally agree, obviously cheap doesnt mean a good investment but all investment styles generally follow cycles. Houses have been going gangbusters and now are falling faster than ever, old appartments in gentrified areas are going to be increasinly attractive especially with increased migration and rental demand.

  • 

    Cherry12 on 09/01/2023 - 20:56

    Thanks for your advice and for the links, will start looking into other cities to compare. Would definitely prefer house with land but it's expensive here in Melbourne.

    • 

      ZloyKrys on 09/01/2023 - 21:01

      +2

      Check the buy and sold prices for the apartments linked. And the timeframes. It's a very similar story for apartments pretty much everywhere except where living in apartments is a norm, like in Sydney.

      Try not to get into a strata schemes, buy something with land even if it's say Adelaide. You'll do much better.

      • 

        Cherry12 on 09/01/2023 - 21:11

        Thanks!

  • 

    Danger on 10/01/2023 - 12:19

    I need to understand debt recycling better. So if you don't put that $300k into PPR and use that money to buy an investment, you can still claim tax deduction on investment, right ? Are you saying you can double dip on tax deduction if you borrow $300k equity from PPR ?

    • 

      larndis on 10/01/2023 - 12:57

      Yes, you can still claim allowable deductions, but you wouldn't have interest costs. Instead, you would continue paying non-deductible interest on your PPOR. If you put the 300k towards your PPOR and instead get a 300k loan for an investment (doesn't matter what property it is secured against), the interest payments will be deductible

      • 

        Cherry12 on 10/01/2023 - 21:00

        If you get a property investment loan, is the loan secured against the new property or the PPOR? Thanks!

        • 

          ZloyKrys on 10/01/2023 - 22:06

          +1

          @Cherry12: Both. 20% by PPOR and 80% by the investment

    • 

      ZloyKrys on 10/01/2023 - 13:26

      You don't really double dip.

      ATO considers every amount on its own merits. If you took $300k cash and invested it, sure you can claim running costs like rates, water, agency, depreciation and whatnot, you just don't have the interest deduction because you've paid cash.

      In debt recycling, you take those $300k and pay down $300k of your own mortgage. So your repayments on PPR reduce.

      Then you take a new loan, SECURED by your PPR. You will have $300k equity for sure because you've just paid down that much, the only gotcha you need is to have a borrowing capacity to service a $300k loan. If you then SPEND those $300k to buy an investment, the interest on those $300k becomes tax deductible. The reason is that it's not the security that makes it deductible, it's the purpose of the loan. The same applies if the OP decided to take that $300k loan and buy the VAS index or just picked shares.

      • 

        Danger on 10/01/2023 - 13:34

        Thanks for detailed info. Good to know that interest on $300k becomes tax deductible. What about remainder of loan amount on investment property. For example, I bought 1 mil property with $300k deposit, can I also tax deduct an interest incurs on $700k ?

        • 

          ZloyKrys on 10/01/2023 - 14:38

          +1

          @Danger: Yep, correct, the interest on those $700k is also tax deductible. Since you can actually borrow more than 100% to cover the stamp duty, conveyancing etc, as long as the serviceability stack up and equity is sufficient, it's not unusual to have 106% of the purchase price to have its interest tax deductible.

      • 

        Cherry12 on 10/01/2023 - 21:10

        @ZloyKrys
        Can I get a Property Investment loan only based on the new property only plus both our income? Let's say I pay the 20 % or so deposit.

        Is it similar requirements that when you get a loan on an owner occupier mortgage?

        • 

          ZloyKrys on 10/01/2023 - 21:55

          +2

          @Cherry12: Yep. But if you do it smart, you better put the 20% deposit into your mortgage and take a new loan for investment purposes secured by your PPR. This way you don't owe any extra money, it's just makes 100% of investment loan tax deductible, not just 80%

          After your investment had grown more than 20% (easy with houses, practically difficult with apartments), you can replace the security on the 20% loan with the investment property if you want to unencumber your PPR. It usually costs a couple of hundreds of dollars with the majority of lenders

          When you take out loan for investment purposes your repayment capacity will be assessed based on borrowers income PLUS the amount of potential rent.

          • 

            Cherry12 on 10/01/2023 - 22:37

            +1

            @ZloyKrys: Ohh, thanks so much for explaining with high level of detail. Will take it into account.

  • 

    Brainwhacker on 10/01/2023 - 13:22

    +1

    Great insights OP, need to do research into Debt recycling.

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  StonedWizard on 09/01/2023 - 11:05

  +2

  I am not familiar with the Melbourne market. But as an owner of a 1 bedroom unit in a nice Sydney area.

  I would recommend looking at a 2bd or larger. They’re more appealing to renters and future purchasers. Plus you generally get much higher rent. Apartments around me do increase in value, but 2bd+ tend to have a much higher rate of growth.
  Just be mindful of apartment build quality and strata costs/levy.

  If you can afford to buy a house in the areas you’ve listed, that is generally a safer move. Then again, I’d rather go an apartment in a popular area where I know I’ll always have a tenant over a house in the sticks which will be harder to sell and rent.

  • 

    Cherry12 on 09/01/2023 - 21:00

    Thanks for sharing your experience!

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  mattthefatt on 09/01/2023 - 11:19

  +6

  Go listen to The Property Couch. This question is well answered on a very easy to listen to podcast. All laid out so you can DIY, or you can get help with professional advice from their associated firm which is in Melbourne.
  The first 20 episodes give you the basics. Then pick and choose from there.
  www.thepropertycouch.com.au.

  • 

    ZloyKrys on 09/01/2023 - 11:28

    Best advice /thread

  • 

    praga on 09/01/2023 - 18:27

    Episodes start from 12, are you recommending to watch 12 to 32 or find the missing 12 first?

    • 

      ZloyKrys on 09/01/2023 - 20:46

      +2

      They have the binge guide, look it up, it summarises the wisdom of first 20 episodes and really gives you what you need to get started

  • 

    Cherry12 on 09/01/2023 - 21:03

    Thanks for the link, I see they even have a free book. Will read and listen before buying.

  • 

    Danger on 10/01/2023 - 22:57

    +1

    Such a pain to navigate all the way to bottom/earlier episodes.

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  xylarr on 09/01/2023 - 12:59

  +6

  Why not put the spare cash into an index fund. You get dividends and capital growth, but you don't have the headache and costs of managing an apartment. If your timeframes are long term, just park it there and don't worry about price fluctuations - or maybe look at it once a year when you do you taxes.

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  SlickMick on 09/01/2023 - 13:09

  +5

  As mentioned above, paying off your existing mortgage is the best use of any cash you have. I can't believe you're letting $300K get eroded by inflation instead of reducing your interest payments.

  If you don't want to go into tax-deductable debt for an investment property that is likely to appreciate, I'd look at ETFs following the ASX average like A200 or VAS. Cost can be free to invest and minimal to withdraw, or at most $9.50 per transaction. Don't look at fluctuating prices, just once per year to do tax return.

  If it's long term investment, I'd suggest doing it in super as the tax advantages are generous. You just can't change your mind and get it out earlier.

  • 

    Millikano on 09/01/2023 - 23:03

    +3

    OP mentioned that they've got this amount sitting in an offset against their current mortgage, so they are indeed getting a benefit.

    • 

      SlickMick on 10/01/2023 - 09:28

      +5

      Oh I missed that. I'd be leaving it there then.

• 

  nephilim on 09/01/2023 - 13:13

  +2

  Old apartments come with lots of risks such as water leaking/mold, saw this myself in younger age. Literally 1 wall molded to death in 1 month and room was full of silverfish.

• 

  bigsaver on 09/01/2023 - 14:40

  +11

  Please get financial advice… property only makes investment sense if you are leveraging…why on earth would you spent 250K to get $5K after expenses and still be taxed on that? And did I mention you have to deal with tenants and fixing things? I'd rather invest 250K elsewhere and just watch 15K get to my account tax free…

  • 

    GandalfTheCheap on 10/01/2023 - 12:13

    +2

    Amen. Being a landlord is stressful and risky.

    It can be OK if it's a house with land in the right location and goes up in price a lot 10 years from now, but

    • Right now property prices are either falling or not rising much, depending on the suburb. Not likely to see big gains in the next 5 years or so.

    • Even when they are rising fast, they are usually going to be beaten by other (easier) investments (like ETFs) in the long term.

• 

  Drakesy on 09/01/2023 - 15:47

  +8

  With Banks returning 4% + i'd seriously reconsider purchasing an investment property, given the next couple of years will likely be rough.

  Just to break even on a house you'll need 10% growth.

• 

  Pufff on 09/01/2023 - 16:39

  +2

  Not financial advice.
  - Pay or offset debts.
  - Park spare cash into high int acct while deciding.
  - If thinking long term, people have mentioned ETFs, why not Sal sac into super, cash flow permitting. Unless your in like your 20 or maybe even early 30s.
  - investing the rest in shares or property then comes down to personal preference and risk appetite. However, as others have said land is the potential growth not the building.

• 

  Ghost47 on 09/01/2023 - 17:29

  Buy a REIT like O. That way you get monthly income for doing nothing.

• 

  Aap Ke Papa on 09/01/2023 - 17:48

  +4

  An apartment is never an investment.

• 

  tessel on 09/01/2023 - 17:56

  +1

  No

• 

  whey4000 on 09/01/2023 - 18:37

  Where are the apartments for 250k?

  • 

    Cherry12 on 09/01/2023 - 21:10

    For that price 1 bedroom apartments in several parts of Melbourne CBD, Carlton, St Kilda, Noble Park, etc.

    • 

      drfuzzy on 09/01/2023 - 23:23

      +4

      They would be absolutely terrible and have close to zero capital appreciation.

      • 

        Cherry12 on 10/01/2023 - 21:13

        +1

        Some are nice and very liveable but yes the capital growth is negative on suburbs very close to the city.

        • 

          ZloyKrys on 10/01/2023 - 22:04

          +1

          @Cherry12: It's more of a problem with property type than suburb. Practically all apartments that are not high end in Melbourne had negative capital growth in the past 10 years, when accounting for inflation. There is no scarcity of apartments and this is the reason why they underperform. There's always another better apartment complex being built just across the road

• 

  LoserScott on 09/01/2023 - 19:20

  -1

  Give me the money and I'll buy a 1 bedroom apartment and rent it to op.

• 

  RolandWaites on 09/01/2023 - 20:19

  +10

  Invest your money in something that brings in returns and also benefits society. The last thing Australia needs is more landlords driving up the price of property.

  • 

    ass3ts on 09/01/2023 - 23:32

    +1

    While one of the dominant values of the said society itself is think about yourself don't worry about the rest.

  • 

    smartazz104 on 10/01/2023 - 07:12

    +1

    something that brings in returns and also benefits society

    Such as…

    • 

      GandalfTheCheap on 10/01/2023 - 12:17

      +2

      Most businesses produce something of value.

    • 

      Drakesy on 10/01/2023 - 13:18

      +1

      Social Housing

  • 

    ulun-lpg on 10/01/2023 - 11:23

    -1

    i was going to say the same. has been renter the past 20 years. definitely try not to contribute to the problem. housing is basic rights

  • 

    FallaM on 11/01/2023 - 15:01

    These comments are so lame, and there are lots of forums (Looking at you Reddit) where people ask for individual financial advice and you always get a stinky leftist complaining about how immoral it is to seek financial success and eventual independence.

    We don't care. The world is, and never will be, your ideal cuddly little utopia. I am looking out for me and my family only. Most leftists are snarky idealogues of which I don't care to contribute to their delusional cause in the first place.

    • 

      ssfps on 11/01/2023 - 20:12

      +2

      I wouldn't tell somebody what to invest in, and there is enough corruption in the world that practically you are right. There is little point in trying to "do the ethical thing" when we can't even agree on what the ethical thing to do is.

      That said, I'm also not an (profanity) that revels in false dichotomies and the false belief that "the world will never be fair" to validate explicit selfishness. Will you be satisfied with this philosophy when your elderly grandparent is scammed, or your school aged kid is bullied, or your teen daughter is raped? Surely in that moment you still accept that everyone is simply out for themselves and it's survival of the fittest, and that's fine?

• 

  ribze1 on 09/01/2023 - 21:39

  +1

  Go for a house some where you can afford, yes it'll mean more debt but better long term.

  If going for a unit it'd be better as a 2 bedder as it means more people can live there, makes it more attractive to renters as they can split the bills. Plenty of 2 bedders in my block have 4 adults and 2 kids in them.

  • 

    JimB on 10/01/2023 - 12:40

    +1

    4 adults and 2 kids in a 2 bedder?

    Imagine the wear and tear on the property!

    • 

      ribze1 on 10/01/2023 - 14:01

      Extreme example, but this occurrence answers the question many ask about immigration (where is everyone going to live?).

      • 

        Cherry12 on 10/01/2023 - 21:18

        Wow! That's a lot of people. Now after getting all this advice have started looking into 2 bed units and checking which areas have gains. Thanks!

      • 

        JimB on 11/01/2023 - 10:00

        +1

        Extreme but not that unsurprising given the cost of rent and the shortage of places to rent.

        I wonder if any of the 2 bedders with 4 adults and 2 kids that are rented, that the owners know there are that many people living there. I certainly wouldn't be happy with that.

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  Mrcamel79 on 09/01/2023 - 22:13

  +2

  Consider if you would be (financially) ok if tomorrow your investment turns bad and your down a lot. I.E think about how long you are prepared to wait for payback, and is payback an ongoing return or cashing up. Use this to consider risk tolerance yiu are willing to take on as well. Consider other investment formats like shares or commercial property, and definately get some financial advice but by a completely independant financial advisor befote you do anything.

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  drfuzzy on 09/01/2023 - 23:22

  No.

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  Kabal on 10/01/2023 - 00:07

  +1

  Can’t think of much I would rather do less lol

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  helpme on 10/01/2023 - 01:33

  -3

  You have a house, why go for a second one when others are struggling to afford their first?

  • 

    HiDave on 14/01/2023 - 13:56

    Username checks out.

    • 

      helpme on 14/01/2023 - 18:13

      It's just a sad state of affairs society has become. Constant barraging of rental crises and a shortage of homes for people to buy. Yet some people who already have a home seem to be immune and want to make it even worse than what it is.

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  mousie on 10/01/2023 - 09:39

  -1

  have you made contributions to Superannuation, that's a nice easy way, if you haven't reached your caps, to invest, and you can split the mix of investment classes. It's very speculative otherwise.

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  spammingb on 10/01/2023 - 10:27

  +4

  The whole point of investing in property is leveraging with borrowing from the bank. Theres no point in investing 300k into property all with cash. You need to borrow

  Looks like you don't even understand the basics. I encourage you to get more educated before dropping 300k

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  Blitz001 on 10/01/2023 - 11:19

  +1

  How about you leave it for some first home owner to buy and be content with your current financial situation and 300k in savings.

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  Hangryuman on 10/01/2023 - 11:23

  +1

  as an ex-Melbourne real estate salesman I would suggest taking time (months) going to open for rental and sale inspections to look around your preferred area and becoming friendly with several real estate salespeople

  my first house a friendly real estate saleswoman called us up and said it's been listed 20 minutes ago and if you want to be first, come now - we did, it was amazing - a rare and unique house - we bought on the spot and it was wonderful

  talk to agents about best rental prospects and listen to their suggestions - agents have their finger on the pulse of the market and can tell you what works and what doesn't

  dunno 25km out - I worked inner - Fitzroy/Carlton mainly - where stronger demand is expected

  outer suburb rental demands may tend to rely on proximity to train stations, shopping centres, new build attractiveness, nearby major projects for tradies - different factors from inner city

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    Cherry12 on 10/01/2023 - 21:25

    Thanks for your input. I've started booking inspections but not willing to buy until I get professional advice and get more knowledge on risks. Just to start checking areas.

    Would you advise to get a real estate agent to help us buy? How much they charge? Or is that only worth it if buying an expensive property unlike our plan.

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  zeoko on 10/01/2023 - 12:58

  Look for advice on the Facebook page Property Forum Australia. Lots of investors there who can help you get answers.

  • 

    Cherry12 on 10/01/2023 - 21:26

    Excellent idea. Added! Thanks

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  Longtimescroller on 10/01/2023 - 13:42

  +1

  I think people often get caught up on history and assuming past events are predictors of future.
  Land has appreciated significantly over the past few years and cyclically there has never been a greater divide between house and apartment prices.

  I personally think with rising migration and a tight rental market, apartments are a safer bet over the next 3-5 years.

  I wouldn't touch anything built in the last 10 years though! If you buy something in a good area with good "bones" where most of building depreciation has already occured your should be fine. If nothing else, you should be able to get around 4-5% rental yield…

  • 

    Cherry12 on 10/01/2023 - 21:30

    Thanks for your advice!

    You mean nothing built from 2012 onwards? Up to how old would you say an apartment is good to buy without causing too many maintenance issues?

    Saw a very affordable 2 bed apartment on a good area but I'm put off by knowing it was built in the 1970's.

    • 

      Longtimescroller on 11/01/2023 - 07:46

      Id prefer to buy something built in the 70s than something built post 2000s, if its been around fornthat long without major issues its probably a good sign.

      Old builts are normally very simple in their design and if they are built on sandstone even better!

      What area are you looking in?

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  Assiduous on 10/01/2023 - 13:44

  -2

  No, I would not as being an absentee landlord / rentier interest is morally bankrupt as you are effectively enslaving young, and disadvantaged workers to profit the bank first, and then if all goes to plan yourself. Invest productively, be a good Citizen and pay your taxes, and avoid structuring your financial affairs such that you are exposed to significant regulatory risk. It's well known that there are a lot of policies around taxation and property that need to change, and the pressure on government to do so is only increasing.

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