NSW $1.6-$2M Investment Rozelle / Inner West or elsewhere....?

Hi

Currently looking at buying our final residential purchase for the portfolio. We hold properties in Brisbane, Adelaide and Melbourne so this provides the Sydney exposure.

We have just moved to the Inner West from overseas and really love the area. It goes against the bigger house / bigger block appetite at the moment but I feel that long term there will be continued strong demand for smaller housing close to a great village lifestyle (e.g. Darling Street).

We could look at buying a PPoR around here at around the $2M mark and hold as a 10-15 year investment if we move away again in a few years. Ideally we'd be in Rozelle but could be challenging to get something nice in the current environment.

Alternatively we could spend around $1.5-$1.6M and look for somewhere a little more up and coming further out and/or larger block. If so, any suggestions on where to look for maximum growth over the next 10-15 years?

Ideally we'd have our own house to live in but if we can't afford what / where we want to live (Rozelle / Balmain) then it's best to just rent. The key focus is long term growth.

Thanks in advance!

Mark

 

Your last house implies PPOR, right?

If so who cares about where the most optimal growth. Buy where you want to live. If you've been rentvesting for a long time this is your chance to spoil yourself for once and let loose a little.

It's hard to break from this investor mentally I know. I keep telling myself my last / PPOR purchase wasn't the most optimal one I could have made. But I need to keep reminding myself I rentvested for 15 years so that buys me the right to be a little reckless with my final one.

 

We've lived in Rozelle a few years ago and loved the village lifestyle but close to water and CBD. We currently also manage a few in Rozelle and Balmain with plenty of rental demand.

For $2m as a PPOR you'd probably have to sacrifice the parking or it would be older or a smaller block of land. Other considerations could be Lilyfield or Glebe/Annandale depending on the size of house you want.

Around $1.5m you could consider pockets around Stanmore/Petersham for a terrace thats been renovated. Or for something different, beachside apartments (Randwick, Bondi etc) are comparatively decent value given the temporary decline in rental demand.

 

Yeah I get your point but we’re likely to move out of it in 3-5 years and then hold it as an investment. I don’t think we’ll be in Sydney long term.

 

Thanks Mel. Yeah I realize it’s tough. The one we are currently renting would probably go for around $2M on the Lilyfield side of Victoria road but who knows in this environment.

Thanks for the other recommendations. I’ll take a look.

 

We live in that neck of the woods (4 bed PPOR, Lilyfield side). Stock ~$2m is mainly without parking (unless you drop to 3 bedder/smaller block) otherwise most renovated 4 beds with parking on decent block approaching $3m . Given you're talking 3-5yrs max, I'd suggest you have an eye on rentability - 3 bedder with parking arguably more popular to a broader rental pool.

 

We're buying in Balmain/Rozelle at the moment and the market is tough. Some crazy results to say the least (42 Waterview intially guided 1.75m, reserve of $2m on auction day and sold for $2.65m). As Mel said, parking is a premium but $2m around Rozelle will still get you something nice although might have to be on the south side of Victoria Rd.

- Andrew

 

https://m.realestate.com.au/property-house-nsw-rozelle-135517038

Round the corner from us. Will probably go $1.8/9 I’d think, but a good example.

North Lilyfield gets you more land for your $, and still close to Darling St

 

Thanks mate. Yeah I think we’d definitely struggle to get a 4 bedroom that’s actually livable with a car park. It’s all good to buy something average with the plan to renovate in the future if it’s an investment but not great if you actually want to live in it straight away,

 

Wow. That’s nuts. I guess that’s a decent piece of dirt. But wow. People I guess get carried away when they are buying their PPoR for the future. We’ll just walk away if that’s happening everywhere.

We live on the South side of Victoria road. There is obviously more bars / pubs / cafes on darling street on the north side and it’s generally more desirable up there but I can’t help but think that the south side will get dragged up if those areas sky rocket. It’s only a 10 minute walk and there are also some nice cafes on the south side and looks like a good gym (we have only just moved in). With the new apartment building going up on darling street with commercial at the bottom I can’t help but think that there will be more and more shops / cafes on the south side going forward making it note attractive. Thoughts?

 

That’s right near our rental. Everything about that looks great for us but you sacrifice on the road. Denison street appears to be a rat run / quite busy. I wonder if that would put people off in the future when selling / renting. A really really nice place just up the road went for $3M though. So obviously not everyone is bothered.

We have moved onto Cook St. It’s super quiet. We’re still moving our stuff in but overall I think we’d be happy to live in this area instead of paying an extra $500k or whatever to be on the north side. My gut tells me the growth will still be good and I reckon the area will get better and better over time. Could be wrong.

 

The leagues club redevelopment will greatly improve the south side, I haven't looked into when it'll be completed but quite a few years off I think. It hasn't changed much in the last 8 years or so since we live in Padstow Street.

Cook is a lovely super quiet little street (we manage the house next to the park) although there's a lot going on underground there..! Interactive Map | Westconnex

 

I like the south side personally but demand is higher on the north side to be on 'the peninsula'. I see a lot more value for money on the south side though so if you like it, then yes I'd be looking there.

It's carnage at the moment though. We are fighting very hard to get off and pre markets and almost all vendors and agents are pushing through to auction, even those who tell you they'll take pre-auction offers. We're negotiating on one genuine off market at the moment where the vendor just doesn't want the stress of an auction campaign or to pay advertising (even though the agent wants it) but they are rare at the moment. The name of the game is getting into a property through our agent contacts while photos are being done and the like and then being ready to go with everything done and an offer ready by the time it's released to market.

All agents saying more stock is coming, but then again I've always heard agents say that. It's possible the end of JK will create a minor subsidence in demand but I think this will be perception only and not a material change in underlying demand. Most people on JK aren't buying the properties we're seeing blow up the reserve.

Anyway, I'm off to bid at an auction this morning for a client so will get some further market feedback then.

- Andrew

 

Wow, I hadn’t seen that development. I was just talking about a smaller one on darling street.

Regarding the tunneling, we are renting in a small gap between the tunnels. Not sure how far they have progressed with that? Maybe we’ll be feeling some vibrations at some point when drilling. Not sure if there will be long term implications from the tunnels.

 

Ok that’s great re south side. Thanks.

Sounds like the market is extremely difficult. Helps to have / be a buyer’s agent for sure. We are working on a pre-approval and hopefully the stock levels pick up soon. There is bugger all to choose from and so much sells extremely quickly.

Good luck today!! Let me know how it goes.

Thanks,
Mark

 

Indeed! It sold for $350k above. First bid was a knock out $200k above. There was an audible groan from the bidding crowd. As I said, carnage!

- Andrew

 

Ughhh. Thanks for update. I hope more stock comes along soon.

Thanks,
Mark

 

https://www.realestate.com.au/property-house-nsw-rozelle-135551434

..a big price (guide) noting last sold '14 $1.65 and only changes are kitchen doors, bathroom tiles.

 

That’s a big increase. Nice place but seems like a lot for that street without a car park. I wouldn’t be surprised if it goes for that though which is unfortunate.

 

Yep, my guess is a 50% bump over 7 years will be a piece of cake in this market.