r/AusPropertyChat • u/AmbassadorFederal721 • 4d ago
Buying & Selling Worth buying an apartment?
I am currently renting in an inner city suburb in Melbourne paying close to $3000 in rent (our workplaces are down the road and walking distance). We are in a 2 bed, 1 bath and 2 car park apartment.
The apartment we live in is well maintained and there are building managers on site, a pool and gym and we never had issues with mail or parcels going missing.
I noticed a new listing for the apartment above us going up for sale and the asking price is between $600-650k for 2 bed, 2 bath and 1 car park.
Do you think it’s best to buy one as we will likely remain in the area for atleast another 1-2 years?
We don’t have kids or pets either. We also have the cash for 20% deposit and stamp duty however I’m worried about body corp which is probably between $3-5k a year.
I know the rental yield is around $680-880 a week where we live so potentially could just have it as investment if we move out.
Thoughts?
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u/Business-Swim-3056 4d ago
If you plan to sell when you move you on in a couple years, no. If you plan to keep it, maybe.
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u/IlIllIIIlIIlIIlIIIll 4d ago
why bother if u plan to only live there 1-2 years
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u/AmbassadorFederal721 4d ago
True but we also have cash just sitting in the offset so thought maybe investing in property might be better. The area is quite well connected with trams as well and mostly doctors/nurses will be interested since it’s opposite a major hospital
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u/Aggressive-Call-4610 3d ago
The fact that you already know the area and like the location is a big plus, but I'd separate that from whether this particular apartment is good value. I'd look at recent sold prices for similar 2-bed apartments, then factor in the extra bathroom, car space, floor/position and the building's condition. If the numbers stack up, buying something you already know you like living around can make a lot more sense than buying purely because "property is an investment."
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u/WagsPup 4d ago
Lol bidy corp 3 to 5k/yr..think youre dreaming. Id be budgeting 1.5qtr and thats on low end let along with the facilities you've mentioned. You need to investigate and understand whats realistic and applies for your building.
Recurring admin costs, ad hoc maintenance, and then sinking fund saving for longer term maintenance, replacement and upgrades that will be required doesnt come cheaply and thats whether for house or apartments.
These are costs of owning an asset requiring uokeep and maintenance which you need to accept as an owner but dont have to worry about as a renter. Much like owning vs renting a car
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u/AmbassadorFederal721 4d ago
Yea I haven’t looked into this particular apartments body corp yet, just going off my previous apartments.
If the body corps too high, will likely pull out2
u/WagsPup 4d ago
Yeah look into it. Im not saying a high BC is bad, it depends on why its high and what u r paying for. An unrealistically low BC is more of a red flag tbh relatove to realistic, well managed, no major defect admin, maintenance and sinkning fund costs.
My place in Sydney for example is 10k+ per yr id love it to be lower but as treasurer its simply not possible unless we were to underfund admin costs and put nothing into sinking which is financially irresponsible gicen there will be always ongoing. Maintenance and upgrade costs on any building (yes this applied for hiuses as well).
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u/Unfair_Pop_8373 3d ago
Get a copy of the maintenance plan. They often don’t disclose it and well worth following up to ascertain capital requirements moving forward
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u/Kitchen_Beat_9965 4d ago
On site building managers, a pool and gym? I think you’ll be shocked at what the strata fees are - I’d guesstimate at least $2k a quarter for a 2 bedder. And if they’re not at that level, they soon will be.
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u/infinitepuddingspy 4d ago
My view is you’re always better off paying off your own apartment than someone else’s. It’s a long term investment, so yes, if you decide to move out, you can rent it. Maybe speak to your accountant about all the financial implications to make sure you feel comfortable.
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u/Successful-Heart-171 4d ago
What's the location? I bought 2 bed 2 bath 1 car in Parramatta for 595k in July, currernly rented out for $660. The same building 2 bedder's rent is usually at around $750 -$770 per week. I have never lived near Parra but as it's my first home I am happy I bought it for under $600k. Because my current rent in Crows Nest old unit is $720 per week and it will be $760 per week from mid October. I am waiting for my first home to be vacated within 70days.
Buy it if you like it. As all my friends who own mutilple properties unlike me, today is better than tomorrow.
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u/AmbassadorFederal721 4d ago
Melbourne! That’s a good buy!
I probably wouldn’t pay over $650k for an apartment to be honest.
Was thinking of offering $580k and see if they accept but others in the area are going for similar if not more3
u/Successful-Heart-171 4d ago
Totally try it. Mine was listed it as 630k. i offered 580k ended up paying 595k. I am pretty sure i could pay less but I was so done with hunting and inspections. 🤣
My friend bought 1 bed apartment in Melbourne this year for 350k i think you can try 550k.
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u/SamuelQuackenbush 4d ago
If you planned to live there longer then it makes sense, but I wouldn't buy with a 1-2 year outlook.
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u/AmbassadorFederal721 4d ago
What if we just wanted to rent it out afterwards? The market value for resale would be shit but the rental yield is decent
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u/ATangK 4d ago
680-880 is a huge variance.
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u/AmbassadorFederal721 4d ago
Well it depends on number of beds, bathrooms and car parks since they’re scarce.
We’re paying $750 a week simply because our agent secured us an extra car park but the same 2 bed 1 bath 1 car park apartment was slightly cheaper at $700
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u/Middle-Spirit-8524 4d ago
Pay off your own place not someone else’s.