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Apartment Purchase Advice; Are they good investments?
Topic Started: 14 Sep 2014, 02:43 PM (1,415 Views)
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Hi Guys,

I hope im asking this in the right forum, if not please be gentle :)

Im contemplating purchasing a small (57sq) 2 bedroom apartment in a nice central road in St Kilda, Melbourne. It is 1 of 16 properties in this development, the rooms seem pretty small but there are not many images to see exactly how small the unit would be. Ive been seeing apartments in the region of 67sq also, but the finish of the build and the location is not as central. This property will be competed in early 2016 and the cheapest on level 1 is $575k, then it goes up to the 3rd floor for $625 (same floorplan, just higher).

Do you guys think this would be a good investment for a home to live in? I get mixed feedback on apartments and the Melbourne market. Hence why im asking you guys :)

Thanks for your help

Neiko
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Foxy
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Zero is coming...

Well sir you ask a question the perplexes me.
When my wife and i went to New York to play croquet i noted that the whole of Central Park is surrounded by effectively apartments.
These apartments are owned by arguably the richest people in America and maybe some of the richest people in the world.
So.
The question must be broken into two parts.
1) is an apartment an "investment" and in your case the question is an apartment a "good" investment.
2) Is an apartment a good place to live.

Well clearly an apartment in the "right "location is a good place to live and a good investment.

But maybe central Park New York is the place to be.

Maintenance is the biggest issue that i can think of, then you have to be in apartments where the occupants have the coin to upkeep the apartment.

So please may sure that your corporate body has no debt and relatively wealthy owners.

Good luck and please let me know how you go.

Peter
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peter fraser
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neiko
14 Sep 2014, 02:43 PM
Hi Guys,

I hope im asking this in the right forum, if not please be gentle :)

Im contemplating purchasing a small (57sq) 2 bedroom apartment in a nice central road in St Kilda, Melbourne. It is 1 of 16 properties in this development, the rooms seem pretty small but there are not many images to see exactly how small the unit would be. Ive been seeing apartments in the region of 67sq also, but the finish of the build and the location is not as central. This property will be competed in early 2016 and the cheapest on level 1 is $575k, then it goes up to the 3rd floor for $625 (same floorplan, just higher).

Do you guys think this would be a good investment for a home to live in? I get mixed feedback on apartments and the Melbourne market. Hence why im asking you guys :)

Thanks for your help

Neiko
I know that St Kilda is an expensive area, but that price seems very high.

I wouldn't buy off the plan, and I wouldn't buy a two bed apartment with such a small floor area. It sounds more like a one bed with a broom cupboard masquerading as a second bedroom.

Buy a pair of sneakers and wear them out looking at every unit for sale in your area of interest for 3 months before you make an offer.
Any expressed market opinion is my own and is not to be taken as financial advice
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Jimbo
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neiko
14 Sep 2014, 02:43 PM
Im contemplating purchasing a small (57sq) 2 bedroom apartment in a nice central road in St Kilda, Melbourne. It is 1 of 16 properties in this development, the rooms seem pretty small but there are not many images to see exactly how small the unit would be. Ive been seeing apartments in the region of 67sq also, but the finish of the build and the location is not as central. This property will be competed in early 2016 and the cheapest on level 1 is $575k, then it goes up to the 3rd floor for $625 (same floorplan, just higher).

For some strange reason, when a developer advertises apartments off plan at (say) 575k, people tend to accept that as being the price they will have to pay. Because a developer is selling the property, prospective buyers tend to accept the price in the same way as they would accept the price of a loaf of bread in Woolies.

Negotiate. Tell them that the development looks good but you are not interested at 575k. Tell them that you would be interested at around 450k. You won't get it for 450k but if they come back to you, you will get it for a lot less than 575k.

See what happens.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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stinkbug
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Forget buying off the plan. Get yourself something that is superbly located, and maybe a bit run down, then spend a few dollars (not too much) renovating it to look fresh and modern. Use the returns to pay off any non-deductible debt you have first, then to pay down the IP itself.
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While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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Dr Watson
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neiko
14 Sep 2014, 02:43 PM
Do you guys think this would be a good investment for a home to live in?
Well, which is it? A home or an investment?
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
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stinkbug
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Jimbo
15 Sep 2014, 09:49 AM

Negotiate. Tell them that the development looks good but you are not interested at 575k. Tell them that you would be interested at around 450k. You won't get it for 450k but if they come back to you, you will get it for a lot less than 575k.

See what happens.
This approach does not often get you the result you will want, but the advantage is that it costs nothing to implement and occasionally you'll land a stone cold bargain.
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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Jimbo
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stinkbug
15 Sep 2014, 09:50 AM
This approach does not often get you the result you will want, but the advantage is that it costs nothing to implement and occasionally you'll land a stone cold bargain.
I've always taken this approach when buying anything with a big ticket price (car,house,furniture etc).

Nine times out of ten you will be told to go away but one time in ten you will bag a bargain. In my life I have been told to go away a hundred times but I have probably saved 200k in the process.

Easy money.

Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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stinkbug
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Jimbo
15 Sep 2014, 09:59 AM
I've always taken this approach when buying anything with a big ticket price (car,house,furniture etc).

Nine times out of ten you will be told to go away but one time in ten you will bag a bargain. In my life I have been told to go away a hundred times but I have probably saved 200k in the process.

Easy money.
I agree, and my post wasn't suggesting the OP shouldn't give it a crack.

I also do this, and it's surprising how often people will still want to continue the conversation, even a price can't be agreed. Having bought quite a few properties, I'd say I normally buy at a good-ish price, occasioannly at a great price, and managed once to buy at a stunning price.

Easy money? Absolutely. You just have to know what you're doing.
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While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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Jimbo
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stinkbug
15 Sep 2014, 10:19 AM
Easy money? Absolutely. You just have to know what you're doing.
The approach that I take is to find as many things wrong with a property that I can.

4th bedroom a bit small, bathroom outdated whatever. Mention those things while you are viewing but don't be so negative as to piss off the vendor.

Tell them you like the place but that it doesn't really tick all the boxes for your own needs.

This approach works well if you have a lot of properties to look at. All vendors want to sell but some actually need to sell and it is those sellers that will give you the best discount. The more properties you look at, the greater the chances are that you will fish out a needy vendor.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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