I am asset rich and cash flow poor working class. This is why I would like to share my journey and kept going to learn.
Why I chose North east of Melbourne
I did some research and decided to buy property in North east of Melbourne. My uncle settled in beautiful north east of Melbourne long time ago. When I just arrived at Melbourne many years ago and I used to live in North suburb. There had a lot of beautiful parks and private schools. It also has one of biggest of public hospital nearby. My uncle used to work very hard in hospital when he immigrated in Australia 30 years ago. The north east suburb had a lot of Australian live in there and not muti-culture suburb mixed with a lot Chinese and Indian immigrants. It was quite interesting that the million suburbs just two suburbs from commission house suburbs.
It was north east suburb of Melbourne and it is 10 km from city CBD. Originally, I went to around 30km of north suburb of Melbourne. I also found that one house with 750 seq land. It was wooden house and with a lot of bedrooms. But eventually, I still chose north east suburb of Melbourne. The main reason was near school, university and hospital. It will better for rental. But the drawback is also obvious. It has a lot of commission houses around. So you will see some low income and drug users walked around. It may not very attractive for family to live for long term.
My purchase experiences
The market was in 2008 and was quite flat. After 2007 hot market of properties, the market had already gain so much gain and even small slip and never go back to originally anymore. I found one old house with 730seq land. It was located in quiet court. It had very wide frontage and looked like 35m wide frontage. The old house had three bedrooms and average bones. The stump had problem and kitchen was very old and most of room were full of wall paper. It was pretty much land value. It was pass by auction and bad condition of house probably scared a lot of family. I went to after auctions and I had little bit experience from 2007 hot market. So the agent show quite clearly that they wanted to closed deal asap. Because the vendor had already went to retirement village. He negotiated to add $3000 to final price. I bought second property. I sold after 5 years later and walked away small amount profit and put in another my project. I did quite a lot cosmetic renovation.
My second properties cosmetic renovation photos
1, I changed the whole kitchen. You can see the old kitchen and it was quite bad conditions and the kitchen was 1950 kitchen.
2, I took out whole wall paper and the house condition was quite bad and I guess that it was just bad bones. It was one of my lessons to learn. I need buy some old house. But it needs good bone. This house had structure issue and stump issue. I painted the whole house and it looked much better.
3, I also built carport which located at left side of house.
If I kept the house today and it will value $850,000-$900,000.
My lessons for second property
1, Buy better portion of suburb.
I should research better house in better portion of north east suburb. Because the price range and budget, I choose inferior part of north east of suburb. At the time buying, I need add $60000 extra to get better portion. I was quite young and always wanted to budget and look for cheaper option. But it proved that you cannot change property location and position. For short time, it may look a lot of money, but it has huge capital growth difference for long term and the house had better quality and near better neighbors.
2, Underestimate budget to renovate old and bad quality house.
Later, I found that there had a lot of problems for this old house. Stump issue, electricity rewires issue……. When you began to renovate one part of house, it become problem for each part.
Eventually, I finished all renovation and it was not look fancy and just reasonable to live in.
3, Know my target and potential buyers.
Over spend renovation was not good idea and if your potential buyers are low to middle income, it will not helpful to over spending so much luxury items for renovation. Because you don’t have market to pay for extra.
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