Were to Invest $400k - $500k Very confused (Sad story) Sorry

[carlau]

My father recently passed away and its like before my father passed away, not only was he my father but my rock and my best friend.

I had my future all planed out, now all my dreams and my thoughts of buying an investment property to live in, have either gone or mad it very hard for me to decide on what I want to do since my father has passed away.

I’ve looked at the following suburbs to purchase a house to reside in and for good capital growth.

-Essendon
-Essendon North
-Essendon West
-Strathmore
-Niddrie
-Moone Ponds
-Doncaster
-Doncaster East
-Balwyn
-Balwyn North

-Apartments at the Docklands and around Sth Melb, South Yarra
-Storage Units in the city of Melb (Would borrow funds from bank with small deposit)
-Commercial Property also like small offices (Would borrow funds from bank with small deposit)

I really need some guidance in were to purchase a property to live in with good capital growth within my budget and maybe an investment property like a small office in the inner city.

Life would be a lot easier to have a partner as that way I could invest my funds in a lot more places and it would also take the load off myself.

Hope some one can help.

Melb West I’m currently residing in.

 

[The Y-man]

Maybe the best thing to do at this moment is to wait......

Cheers,

The Y-man

 

[Prakman]

Dear Carlau,

I'm sorry to hear about your father. I agree with Y-man, take time out and when you feel that you are ready, there'll be the perfect property for you.

Happy investing.

Prak

 

[JIT]

Hi carlau,

Sorry about your father. I agree with others re. waiting...

Nonetheless, this is a property forum so I'm not going to attempt do any sort of 'counselling' for you here.

Now assuming you don't have much prior investing experience (which it sounds like), and given the limited information you've provided, here are some general suggestions...

I would keep things simple. I wouldn't start in commercial property just yet. Also, I don't think storage units are the best option at this point.

The suburbs you mentioned for houses all have reasonably good prospects for capital growth - however, the entry prices are not cheap. Not sure about Niddrie though, sounds familiar, but would have to look at a map to remind myself where it is! Apartments may be an option, but at 500k you could get a house instead, so I would opt for this first.

Hard to say much more without knowing more about your financial situation, income/serviceability and further 'objectives' - financial and personal, which you may or may not want to reveal on a public forum.

Here's where a good financial advisor with an interest in property investment would be helpful - but, unfortunately I think they are a rare breed (though in previous threads some names have been mentioned, you might want to check this out).

Re. having a partner and hence potentially a double income stream - yep, I agree that would certainly help financially - I would almost give up single life for this , maybe even get married ! Just kidding around, anyway, I can't help you too much on this one...

Good luck with it.

GSJ

 

[arungounder]

My father recently passed away and its like before my father passed away, not only was he my father but my rock and my best friend.

HI Carlau,
Sorry about your father passing away. I had to go through what you are going through when I lost my Dad. Take some time and make a wise choice insted of rushing. All the best in your investment.....

 

[carlau]

Thank you all for your kind words. I’ve taken 2 months out and my finical situation as it stands is in the millions from a sale that was just finalized and I just feel lost and want to take small steps at a time back into the property market and start investing again as it will keep me busy and I feel like everything is going up and letting the funds sit there from the sale isn’t going to do me any good.

I’ve been investing in property for the past 15 years from purchasing land and subdividing and building units and renovating. I haven’t ventured into the commercial market yet, but hope to very soon with extreme caution and wont rush into anything. Its just hard as my father was my greatest adviser.

But to all that seen this post and replied, thank you kindly for your kind words.

 

[JIT]

...my finical situation as it stands is in the millions from a sale that was just finalized

...

I’ve been investing in property for the past 15 years from purchasing land and subdividing and building units and renovating.

Clearly lack of money or experience should not hold you back then. With this is mind...taking time out seems like a good move.

Best of luck,

GSJ

 

[Ahmad Azimi]

First of all I'm guessing since your new to investing then stay away from commercial as the risk factor is much higher than residential. Firstly you can only borrow upto 70% for commercial...maybe 75% special case? Usualy with commercial the tenant will ask you for rent free periods when they first sign a lease...lets say 3 months. Also commercial properties are usualy vacant for longer period than residential so any extra repayments will come out of your own pocket so you need to be financialy prety strong.

Storage is not sucha good idea either at this stage. We dont know what sort of capital growth they might have and vacany could be an issue.

About the suburbs, we used to sell some units in Doncaster. I had alot of info on the area but can't find it anymore but in the mean time check out these sites which will give you more info on whats going on in Doncaster. Alot of positive things happening there.

http://westfield.com/doncaster/centreupgrade/index.html

http://www.doncasterhill.com/index.htm

 

[carlau]

First of all I'm guessing since your new to investing then stay away from commercial as the risk factor is much higher than residential. Firstly you can only borrow upto 70% for commercial...maybe 75% special case? Usualy with commercial the tenant will ask you for rent free periods when they first sign a lease...lets say 3 months. Also commercial properties are usualy vacant for longer period than residential so any extra repayments will come out of your own pocket so you need to be financialy prety strong.

Storage is not sucha good idea either at this stage. We dont know what sort of capital growth they might have and vacany could be an issue.

About the suburbs, we used to sell some units in Doncaster. I had alot of info on the area but can't find it anymore but in the mean time check out these sites which will give you more info on whats going on in Doncaster. Alot of positive things happening there.

http://westfield.com/doncaster/centreupgrade/index.html

http://www.doncasterhill.com/index.htm

Hi, I was at Doncater last week and drove around looking at Doncater, Doncaster East, Balwyn, Balwyn North and I couldnt believe how expensive Doncaster has become and how many property investors are on the look out for knock down houses including myself.

One subdived land in Doncaster was selling for $1000 a sqmt thats $500,000 just for 500 sqmt of land. Most or nearly all the homes there are going on Auction you would be lucky to find one that is for private sale.

I was told by so many realestate agents good luck in finding anything in Balwyn North as thats the area I was looking at the most.

I think with the eastern freeway extension, Rigwood will also increase in price in the next 18 months once completion of the freeway is done and expect great captial growth in that region.

Im starting to think Essendon and Moone Ponds are starting to follow the same trend that doncaster is currently going through expect to pay 20-30% more then the reserve price.

I was looking at one house today which was sold prior to Auction in Essendon on a 400sqmt lot of land 2bedroom unit that went for $430,000 and there's plenty more like that.

I seriously was thinking of going door knocking around essendon and making a offer to the owners only if the land is large enough to either rebuild or subdivide and build either 2 townhouses or units. If you look at Roberts st in Essendon all the lots there are 1000sqmt or larger in size and half the street is already been subdived and redelvoped. Its happing everywhere, Pascoe Vale South would be next to look at also.

 

[tubs]

I'm sorry to hear about your loss.

My advice would be to stay away from apartments, storage and commercial. Some people here do invest in commercial property, but since yields are higher, so are vacancies and for a first investment, it could pay havoc with your cashflow.

The suburbs you mentioned are all very good suburbs and appear to have excellent growth prospects. Keep in mind the rental yield you'll get from them though, and make sure its enough to make a fair dint in your bank repayments.

Try to keep your LVR at 80%. In other words, put in 20% plus costs and borrow the rest. You mentioned a million dollars (or more) but make sure you dont go using all this to pay for your property outright. Use the bank to fund the majority of the cost, and you can use the money you have to fund more investment properties. Otherwise you'll lose all the power of leverage.

Also, check with a good accountant what the status of this money is, just in case you face a tax bill that you're not aware of.

Again, this is just my own opinion. I'm sure others will share their advice as well.

Hugh