| Year | Pessimistic (5.8%) | Expected (8.8%) | Optimistic (11.8%) |
|---|---|---|---|
| Year 1 | $695,300 | $715,500 | $736,900 |
| Year 2 | $743,300 | $787,100 | $830,700 |
| Year 3 | $794,200 | $865,200 | $936,200 |
| Year 4 | $848,100 | $950,500 | $1,054,900 |
| Year 5 | $905,300 | $1,043,600 | $1,188,300 |
| Year 6 | $965,800 | $1,145,200 | $1,338,400 |
| Year 7 | $1,030,000 | $1,256,100 | $1,507,200 |
| Year 8 | $1,098,100 | $1,377,200 | $1,697,000 |
| Year 9 | $1,170,200 | $1,509,300 | $1,910,500 |
| Year 10 | $1,246,600 | $1,653,500 | $2,150,600 |
Compounded monthly on the growth and income assumptions above, after contributions and costs. Projections are illustrations, not advice or guarantees.
| Scenario | Return p.a. | Value in 10 yrs | Gain | Goal reached |
|---|---|---|---|---|
| Pessimistic | 5.8% | $1,246,600 | $476,600 | ~year 8.1 |
| Expected | 8.8% | $1,653,500 | $883,500 | ~year 5.6 |
| Optimistic | 11.8% | $2,150,600 | $1,380,600 | ~year 4.2 |
| Date | Recorded value | Expected path | Variance |
|---|---|---|---|
| 06/08/2026 | $665,000 | $650,000 | +$15,000 |
Summary
A 3-bed, 2-bath townhouse at 14 Marlowe Street, bought $28,000 under the median for the pocket, with a rentable granny-flat conversion in the oversized garage as the value-add.
The Ask
Purchase $650,000 with a 30% deposit ($195,000 equity plus costs), the balance on a 5.9% IO loan at 70% LVR.
Recommendation: Invest
Location & demand drivers
Vacancy at 0.9% and falling; the rail duplication opens in 2027 and cuts the CBD commute to 34 minutes. Three childcare centres and a Coles have been approved within 800 m.
Why this market now
The suburb trails its two gentrified neighbours by 18-22% on a like-for-like basis - the gap has closed by a third in two years and the infrastructure catalyst lands mid-cycle.
The property
2004 build, brick veneer, 320 m² corner block, R2 zoning. Sound structure per the building report; kitchen and carpets dated (a $18,000 cosmetic refresh lifts rent ~$40/week).
Income & expenses
$620/week appraised ($32,200/yr, 3.8% net of vacancy). Outgoings $6,200/yr - rates $2,300, insurance $1,650, maintenance allowance $1,400, management at 5.5%.
Comparable sales & rents
Four comparable townhouse sales in 90 days: $655k, $668k, $671k and $690k. Rental comps run $600-$640/week for 3-bed stock within 1 km.
Financing
5.9% interest-only, 3-year fixed option under review. Serviceability holds to 8.5%; a 12-month buffer of repayments sits in offset.
Upside case
Granny-flat conversion approved (~$85k build, +$350/week) and the rail opening re-rates the pocket - the optimistic scenario becomes the base case.
Downside case
Rates rise past 8%, rent softens to $580, and the conversion is refused - covered by the offset buffer and a 27% buffer to negative equity.
Thesis
Buy the cheapest habitable townhouse in the catchment of a funded, under-construction rail line, hold through the opening, and let the comparable gap close. The rent covers the holding; the goal only needs 5.4% p.a. - well under the expected 8.8%.
Safeguards used: Slept on it, Sought a disconfirming view, Defined an exit condition (skipped: checked the base rate / past outcomes, checked incentives & conflicts)
Context:
Settled cash from the June term deposit maturity; brief is a sub-$700k income asset within 45 minutes of the CBD with a value-add angle.
Reasoning:
Best risk-adjusted option of the 14 inspected: under-median entry, catalyst with a committed budget, and a second income stream available without rezoning.
The property rents within 4 weeks of settlement at $620/week or better.
Confidence: 75%
A comparable sale above $700,000 prints in the street within 18 months of the rail opening.
Confidence: 60%
State of mind: Calm, Confident · Review on: 02/08/2027
Building and pest returned clean; two minor items ($1,900 quoted) used to negotiate the price from $662,500.
The reasoning, plan and predictions above were written before the outcome was known. Projections are illustrations based on the stated assumptions - not financial advice.