Covid property search diary

Hello all,

Since I am looking at properties within a 2.5hr drive radius of Sydney every weekend, I think it will be good to put a diary here. So years later if I bought something I will remember how I get to that decision. Also I have some sold details of properties... they will not be disclosed here, however you can PM.

Investment aim : Covid discount

Coverage : Holiday home (must have unique features), normal rental properties (must have rental yield >5%).

Exclusion : apartments, houses on land which is already subdivied.

Target : houses on a piece of land which is normal to the surrounding areas.

 

Date : Sat 11 July 2020
Areas covered : Western Sydney, Doonside, Blacktown, Plumpton

Intension : rental yield feasibility
The market : [asking]
700k for a renovated old house on standard block,
730k for a 15 year old two level house
530k for a rental neightmare - a single level brick home, essentially land value.

Outcome : not looking at that area because rental yield could be 0%, even if the tenant is paying it will be around 2%. Upward mobile stable tenant would just buy their own in the same area, or further out, or renting and moving into newer apartments closer to CBD which the rent drops significantly. i.e. Epping ~400-450 p/w for 3 br now.

 

Date : Sat 18 July 2020
Areas covered : Central Coast, Lake Macquarie, Nelson Bay, North Arm Cove

Intension : check the place around and see if there are opportunity.
The market : It is more like a PPOR market than IP market - as yields are low at 2-3%.
Properties at the right price (meeting the market) with views, and with nothing wrong, and nothing to fix are selling within 7 days.
NAC water front is 20% down from if Covid did not happen. Some listings at NAC sits there for almost a year, with houses slowly taken over by nature and moisture.
Lake Macquarie : some sellers are asking prices as if Covid did not happen, some listings are there for over 1 year...
1/4 listings are new
1/4 are pre-covid

Outcome : for an investor, there are no strong "urge" to invest there. However if I am a local there with a stable job I will be jumping to get my PPOR. (with a view from the Patio / window)

Note : the power stations are killing the views of a lot of properties, why can't they camourflage them ?

 

Which side(s) of Lake Macquarie were you looking?

 

both sides... warners bay is impressive..
in general for IP the rental yield is low, there are some risks there.

with some discounts coming in Sydney (i.e. Hornsby ~1 mil now), IMO CG flow on from Sydney will not be much, it is just depends on the economy up there. AND we are in the middle of a recession.

 

Date : Sat 25 July 2020
Areas covered : Nowra, and surrounds, Jervis Bay, Callala Bay, Berry

Intension : check the place around and see if there are opportunity.
The market :Nowra is an amazing place, within a 5 minutes drive you can see all sorts of properties, from houso, to cheap builds, to project homes, to new builds, to expensive mosman like properties (Riverview road, LyreBird drive etc)

Outcome : Vacancy rates are high there, so not good for yields, AND
Realisation ... : places like Berry is an example of the risk of owning somewhere which there are a lot of surrounding land. Old Berry prices went up, developer and council release land (on the other side of the highway), locals realise that their properties worth over 900k (in the good days), buy new land, and build their own new house, trying to sell their existing property to the outsiders so they can update for a new house and get some profit.... BUT their listing stay there for over 9 months...

as a result, CG is capped.... over these areas can NEVER be higher than price of new land + new build.... at the moment is about 700k to 800k, which is the dead limit.

 

In what area did you find vacancy rates high , I have just bought in Nowra and the agent I might be using as our PM has told me that that there is big demand there and they have 0% vacancy rate?

 

There are two ways generally I use, first just a RE.com.au search for 2 beds, inclulding surrounding suburbs (or not), there are currently 49 listings there, some of them brand new..
over 10 for me is not ideal, and tenants could negotiate more rent reduction.

another way is to use domain.com.au, map view, the more dots there, the more vacancies...

IP (on an ongoing basis), is an accomodation business, I don't want to compete on price, which is my rental yield.

I just went to look yesterday, and will share what I see... quite interesting really.

 

Understand this but I think it’s not so black and white to base your decisions such as what these sites are showing and you would be better off on the ground talking to property managers ect. I brought a property close to Nowra CBD which is in demand for rental. A majority of the properties on these sites are probably getting snapped up quick and if on for a while might be in areas of less demand.

@BuyersAgent would be able to give you more insight being the expert in the area , he helped us find this property and we are very happy

 

of course, you could have a stable tenant who is happy to pay CPI rental increases and never leaves... (mind you YoY cpi is negative for June 2020). regardless of the economy.

but for me, for this moment, if I am looking at different areas, I need some statistics to refer to.

 

Hi @fl360 happy to chat specific stats if you want. Just drop me a line anytime. I am not sure I understand your intentions re the original post or understand your goals so you will need to explain those a bit more clearly.

In general for investors I strongly recommend keeping the vacancy rate for the suburb as low as possible. This reduces the risks you are mentioning ie no tenant or no income.

 

Thanks BuyersAgent, I know you are focusing in that area (South coast / Nowra / Jervis etc). will certainly reach out when I decide to invest in that area.

 

Date : Sat 1 August 2020
Areas covered : Sydney south, Menai, Woronora, Engadine

Intension : check the place around and see if there are opportunity.
The market : some trophy homes up for sale as the tenants disappeared. Some opportunities there, i.e. huge block with good pool, good quality house with the right price, but sold within 1 week.

Outcome : keep watching
Realisation ... : "people are getting rid of their least favourited child" - the market definitely having more least favourited stocks sitting there, getting stale day by day.
i.e. Property with a street number of 4, 14, 24, 13
i.e. Property next to high voltage powerline, car sized street transformers.
i.e. Property on very steep blocks
i.e. Property in the worse packet of the areas.

these least favouriated listings make up around 40% of listings, and no one wants to buy them.

 

I can understand about 13, but what’s wrong with 4, 14, 24?

 

I dont know how much of an influence it has on Southern Sydney property, but Chinese people don't like the number 4 because it sounds like death. They'll go for 8 though.

 

Very bad for chinese buyers - 4 is death

 

4 - die
14 - die for sure
24 - easy to die
34 - born then die
44 - die and die
54 - I die

 

I guess all the non chinese buyers have a chance for these addresses though. In other cultures, 4 doesn't have a stigma.

Ps. Feng shui principles (at least some of them anyway) do make sense, even to westerners.
Me, personally, I'd go feng shui friendly over letter box supersitition!

 

I think in Malay 4 is a good number ! someone need to check this...

 

Depending on the size of the area more than 10 could be still very low and it certainly depends on the quality of those 10 and how much they are asking.
If you are seeking to pick up a bargain in an area that used to be holiday lets for example then there will be currently higher vacancies which will impact the selling price. So sometimes you want the areas with currently higher vacancies as that means more people willing to sell and discount to you.