Apartment vs House

Yeah, that’s a good idea. Will definitely do that.

 

Oh, I thought you said you've already done that and borrowing capacity is not an issue?
This is the FIRST step above all else you need to know what you can afford to borrow, now and for the next purchase as this may dictate what you can buy as your first property. All the best

 

What you think you can borrow, because you think you can service the loan, isnt always the same as what the banks will lend you.

 

I have a bank pre approval worth more than I want to spend, that’s why I said borrowing should not be an issue As for speaking with a broker for my long term plans is something I need to do...

 

I have a pre-approval by the bank, so no issues there...

 

As a serial duplex inhabitant I can highly recommend living in a duplex/villa/townhouse type thing.

Depending on the place you can get a lot of the benefits of living in a house (a yard and relatively less restrictive body corp) but also the better locations,lower buy in cost and lower maintenance of a unit.

It doesn't work for everyone of course but definitely worth a ponder with your budget.

 

Hi Manisha - my thoughts are below regarding each option.

* Apartment in Parramatta - alot of apartments in this area, so vacancy rates likely to be high due to more supply. Rental yield for units would be around 4%-4.5%. Capital growth unlikely to be great in short-to-medium term due to alot of supply in the area, and also apartments in general.
* Apartment in Strathfield - better option that Parramatta as it is in a better location (closer to Sydney) and well connected. Rental yield around 4%. Vacancy rates similar to Parra.
* House (or townhouse) in Kellyville/Rouse Hill - Will be cheaper in Rouse Hill compared to Kellyville, however you can probably find a bargain during the year given the impact of COVID on people financially (people being unable to repay loans etc). I think this option has the most capital growth potential. Rental yield is also around 4% Vacancy rate around 5%.

Out of the 3 options above, I think option 3 is the best - get a house of townhouse in Kellyville area, ensuring you bargain hard.

You also mentioned late in your post about your ultimate goal to buy a dream home in Hornsby/Cherrybrook in north west region - another potential option is to wait things out a bit more (say 6-12months), to see the impact of COVID hit (when government stops paying financial support), at which stage you could bargain hard for a house in Hornsby/Cherrybrook at a much lower price that what you might have thoughts.

Hope above thoughts helps a little bit.

 

Depending on the lender, most pre-approvals are not credit assessed, they're almost meaningless so be careful relying on it.
Also the pre-approval is for the property you want to buy now, it doesn't take into account the fact you want to buy another property in 4-5 years time. So best speak to a broker who can map out the borrowing strategy for you.

 

If it helps, my sister and her husband started off with a house like townhouse in Castle Hill. Very good sized yard and easy walk to Castle Towers. They paid that off by the time she was 30.
A few years later they bought a large full house on big land also in Castle Hill, and sold the townhouse.

I'll suggest buying a house or duplex or large townhouse if you can afford it rather than the apartment then keep throwing money into an offset for it.

If/when you decide to upgrade later, you can then either rent out this first property or sell it, your choice.

I think Kellyville and Rouse Hill have really benefited with the metro going in, so I would really look as these home options over the Parramatta and Strathfield apartments. The lack of transport that had always been the big issue for the Northwest have been resolved with the opening of the metro.

 

@Gockie @Lindsay_W @PropDir @hammer Thanks for sharing your thoughts, it’s really helpful. Would appreciate your thoughts on buying a property in seven hills. There are alot of properties on a big land available and the price seems really cheap if I compare how close it is to Parramatta and City, Why is that? I’ve heard there’s community housing. Does it have safety issues? Considering parramatta is going to be the new central for greater Sydney and more and more companies are shifting there, do you recommend buying there for now?

 

I'd recommend Seven Hills. Close to Blacktown, Parramatta, it has trains, affordable housing.
A friend bought there 18 months ago, I think it's value for money.

One problem though, you are just beyond the 25km? Zone for train fares to Town hall at Seven Hills so the train fares jump up in price.

 

What about safety? Is it a safe suburb? I’ve heard it has a good side and a bad side. Which streets do you recommend?

 

Someone else would know better! I only would drive through it as my aunty has a company in Blacktown and I'd drive the M2 to get there as I used to help in the office (though I would have rather have helped in the warehouse!) Bloody gender inequality!

 

spend time driving around, walking around, take notes of streets, shopping centres etc. observe, note, compare...thats how you do you your due diligence.

 

Very interesting, the suburbs you are considering are so far-flung: from seven hills to parramatta to the hills district to the upper northshore and then strathfield and north sydney.

For me, the suburb is the most important decision to make. Once I made up my mind on the suburb, I'll just pick the best I can afford at the time of purchase.

Some people like to get a large block of land with a rundown house that needs a lot of care, at a greatly reduced price. That's fine if you have the time, interest and knowledge to do it, I've seen many beautifully flipped houses and really admire the folks who pulled it off.

Personally, though, I won't consider living in a rundown place for a few years as it means those years are lost in my life. How much is 5 years of your life worth? But then again, some people don't mind living in an old house and spending a lot of time fixing this and that. So it's really a personal choice.

 

With the pandemic and who knows when this would end... 5 years of life wouldn't worth that much (social life). LOL.