NSW $500K for next investment property

Discussion in 'Where to Buy' started by Andrew K, 30th Nov, 2018.

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  1. Andrew K

    Andrew K New Member

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    Hi All,
    I'm looking to purchase my fourth investment property. I'm looking for some growth but also an area that I won't struggle to find a tenant.
    I'm still in the process of getting finance but I've spoken to my broker and I can afford a property around $500K for my next purchase.
    I've started looking at areas and come up with the following so far
    Wyoming area north of Gosford
    Gateshead, Charlestown and Mayfield around the Newcastle area.
    There are also houses in far Western Sydney and around Campbelltown coming onto the market but I'm a bit worried about going into those areas as they are around the large housing estates that have been built and are going to be built and I think there will be a lot of competition making it hard to get a tenant and possibly dropping rents.
    I could also look at other states but I'm not sure where to start as I'm more familiar with NSW.
    I'm looking for feedback on the above areas and any suggestions in NSW or other states.
    Not expecting exact houses but just general areas to do further research.

    Thanks
    Andrew
     
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  2. Aaron Duffie

    Aaron Duffie Well-Known Member

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    I can only comment on Newcastle and $500k won’t get you much in Mayfield and I wouldn’t be investing in Gateshead/Charlestown. Need $600k-$650k for Mayfield and surrounding areas like Waratah/Georgetown which are good areas. I think you’re right about competition around the Sydney housing estates.
     
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Welcome to PC Andrew

    Seeing that you need more cash for the property you need, whats the 500 based on ?

    Maximum Serviceability or max deposit ?

    ta
    rolf
     
  4. Andrew K

    Andrew K New Member

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    Thanks for the info Aaron.
    There are a few three bedroom houses in Mayfield that are in my reach.
    Do you think these will not perform well in the future?
    What are the issues with Gateshead and Charlestown?

    Thanks Rolf.
    $500K is based on serviceability. I can have access to a bit more but I don't want to stretch myself to my max and get caught out.
    I think I should be able to find an area somewhere in Australia where $500K will buy a decent IP.
     
  5. Skinman

    Skinman Well-Known Member

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    There are loads of areas that you can find a good IP for $500k.

    There are loads of suburbs in Adelaide that you can get a place in your budget that should provide steady growth 4%ish per year and are in demand from a rental perspective.

    If you want to sacrifice a bit more CF you could try Brisbane suburbs around the hills area and maybe pick something up for $500k. May need to be a little closer to $550k now but that’s a sign things are starting to move slowly.

    If you can afford to take a little more risk have a look at Perth as things look like they are starting to bottom out over here and vacancy rates are dropping every week, $500k can get you a free standing home 7kms from the city here!
     
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  6. Aaron Duffie

    Aaron Duffie Well-Known Member

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    Andrew, mayfield will be a good area long term as its closish to cbd but depends what type of investment property you’re looking for. I’ve been looking at Mayfield and a $500k 3 bedroom in Mayfield would need some work and/or small land size. Gateshead is a low socio-economic area and not sure about Charlestown specifically but if you listen to any of the experts they all say buy as close as possible to cbd and Charlestown/Gateshead are much further out than mayfield.
     
  7. Illusivedreams

    Illusivedreams Well-Known Member

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    Campbelltown $550,000 will get a house.

    It's not a good 3-5 year investment but once the airport goes in and even during construction process prices and rental demand will start climbing. 5-8 year play .

    The rent at the moment I'm achieving is $450 PW. I have had the same family for 2.5 years.

    It's a longer play. More money will come into the Aerotropolis precinct than the whole of Adelaide.

    Adelaide is a slow slow burner no lareg growth just steady just above CPI kind of growth.
     
  8. Angel

    Angel Well-Known Member

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    NSW Land taxes There is more to Australia than Newcastle, Sydney and Woolongong
     
  9. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Makes sens

    I'd assume that your personal budget is at that level of expenditure.

    Often many people rely on broker or banker numbers all the while not realizing they can afford more or less than the cash flow outcomes.

    This applies especially to those people that also have ppor debt, since with some smart structure and active debt recycling they can do a whole lot more, . faster.

    This doesn't mean that more.and faster is the right stratwgs for all. Risk profile considerations and personal/ family goals need to be a bigger driver than " it's doable" .,..,.,...so one should

    Ta

    Rold
     
  10. wilso8948

    wilso8948 Well-Known Member

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    Charlestown is just as good as investment as Mayfield. Keep in mind you’re getting into Newcastle fairly late in the cycle. Long term it’s fine.
    Also depends where in Gateshead. Probably a touch lower in class than the other too but still ok pending price point.
     
  11. Propertunity

    Propertunity Well-Known Member

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    Yes OK but be aware of some areas of flooding and also proximity to housing commission properties. Also the median price is $615K - so $500K is doable but you will be buying some work or in a less desirable part of the suburb.
    .
    Sometimes referred to as "South Charlestown" in an attempt to avoid the stigma of low socio-economic and housing com.

    Fine - close to beaches and the massive Charlestown Square shopping centre. Median price there is $620K now so $500K won't get you much. Bear in mind CG has stalled in Charlestown this year (2018) with growth recorded of -0.2%

    I like Mayfield (a LOT) and we have purchased there for clients for over a decade now. Median price there is $607K now so $500K won't get you much or it will need work / be in a flood zone / etc. Even Mayfield West (a bit less desirable) has a median of $570K these days.
     
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