Buying in Bondi

Hi all,

I'm 23 going to buy "something" in the new year as close as possible to bondi beach in sydney.

I've got $1.3m cash and earn ~100k per year ( i run the family business ) I'm thinking i would be comfortable with anything below $3m, but unsure if a bank would loan me the difference( if anyone could give me a rough estimate on my borrowing power would be appreciated, i have only the cash amount no other assets in my name).

I have been thinking about buying an apartment 3 or 4 bedroom and living in 1 of the rooms and renting out the other 3 for ( I'm in the facebook groups for sharehouses ) around $250-300 per week

Has anyone done something like this? i'm more looking for how much turnover of people of there with things like share-houses? My goal is to live in a desirable place but not "waste" my capital and make a return on the lodgers.

 

Hit up one of the brokers to have a look at your servicing - it'll depend on whether you're PAYG or self employed, as well as what other debt you have. I'd say you're unlikely to service an extra $2M on a $100k income without any usable rental income from the property. Lenders won't consider the lodger's board unfortunately, but regardless it would be worthwhile to find out your maximum.

 

Thanks Jess, I will do that .. I'm currently self employed ( i "contract" to the family run business ) and have no debt.

It was my fear that they do not include lodgers board ..

 

@HorribleWestie - are you allowed to travel that far east without a chaperone?

 

I think you'd be looking at approx $2 million purchase price at the very most but one of the brokers can confirm

 

Haha I spend $200 a week ubering it in on weekends anyway and the police haven't sent me packing yet!!

 

I live in the area and its just had a massive growth period so imo it would be a waste of capital . If i was going to do anything like that then (assuming finance is ok) I would buy 3 old, 2 bedroom apartments 5 mins walk to the beach, reno them to look 5 star and then BnB them . This way you've spread your risk and returns should be good Maybe you can live in one of those bedrooms.

 

@datto - any suggestions for a local?

 

@datto where were you in 1993

 

I did something similar when I first started just instead of Bondi it was in Kingswood If your looking for 3 or 4 share tenants try and find a property with two bathrooms(will be difficult in that area). One for males and one for females etc just makes everyone more comfortable. I'd get them to pay in advance as well. Would love to hear about how you go keep us updated.

 

I tend to agree with @Leo2413 . If you buy into Bondi, you might not be able to see good capital growth for an extended period of time (could be up to 10 more years). It is capital sitting on non performing asset, not a very wise investment. However if you are looking at looong term, say 30 years, these Bondi properties would grow. If you just want to park your capital somewhere, buying into Bondi might be a good option assuming the rent covers expenses.

 

This is a good idea as well

 

Why would you even bother with buying a single property and taking on a significant loan/tenants/property managers/council rates/water rates/insurance etc?

With that kind of cash, 1.3mil pesos can see you immediately replace your 100,000 peso income by strategically placing the cash into equities that will be truly passive income, modest growth plus no headaches.

You can still work if you like, on your own terms, literally forever.

pinkboy

 

Home detention.

 

Yes. Steer clear of the place. You'll end up speaking Yiddish or Kiwi.

 

I agree. Now would not be a good time to buy there. A place like bondi would be way better to wait for a correction and then get way more value for money. (I know the waiting is tough but patience is rewarded - I've benefitted many many times from this approach).

 

Yep. We bought a few places 4 years ago pre boom in the 500k range. On one street alone we made 2 mil equity from this nice boom. I distinctly remember at the time the doom and gloom of the market was so thick you could cut through it with a knife, as people were saying prices will tank, no one can afford a unit for 550k. LOL . That boat has well and truly sailed for the next god knows how many years imo. New prices start at 900k+for the crappiest crap and goes over the 1.2mil mark. And there is no shortage of demand. Sydney's rich gotta live somewhere and many of them choose these beachy surburbs: Bondi, coogee, Bronte etc.

Look at this 1 bed older unit. Sold 907k
4/23 Warners Avenue, Bondi Beach, NSW 2026 - Property Details

 

Nice work @Leo2413. I agree - I've got a 2 bedder in North Bondi. Easily over $1m for that little bad boy now.

 

Yeah you would have done really well ! When did you buy it?

 

at 23 you are in a fortunate position, many will take years to make $1m in equity, let alone cash.

So how did you do this on income of $100k pa?

 

Bought in 2001 @Leo2413 - so got the tail end of the last boom and all of this one. Was my PPOR until 2010. What about you mate?