Define 'Cheapie'

Cheese and rice, was this a car in the yard or a daily driver?

 

Nope, daily driver. His car was a mess from inside to out. I vaguely recall he jokingly admitted to dropping some plant seeds on the floor or something like that... but funny enough he kept decent care of the home and rent never late.

 

Cheapie to me is one where after all purchase costs, stamps and LMI it is very close to costing me nothing in terms of cash flow to hold.....or it's below the median in a suburb as posters above mention.

Bought the cheapest house in a suburb in 2013 that I thought was literally not much more than land value for $309k....rents for $330 per week, it feels to me like I am getting rent for a block of land

I bought one in 2014 for $418k that rents for $440k that was "cheap" for the comparables in the suburb, so it "felt" cheap at the time.

2014 bought the cheapest 3 bedroom house available in another suburb at the same time, I'd call that a cheapie asits below the suburb median. Cost $354k, rents for $390 a week.

Justifying purchases to yourself sometimes is an interesting exercise in hindsight

 

Buying the cheapest house in an area should qualify as a cheapie.
It can be an indication when a place is on the up, when all of the cheapies are disappearing.

 

Generally sub 200k but it could be even lower for some of the large regionals

 

Yeah mate, as he said - regional

 

Cheap in my book is >10% below the median price of COMPARABLE properties ie a 3/2/1 must be compared with other 3/2/1 in the area not the median price for all sales. (It also helps if you pick it up for less than what your valuer will put on it).

 

That sounds pretty cheap to me, no matter how you try to sell it!

 

When the stamp duty costs under $2k.

 

To me, cheap and cheapie are not much related.
Cheap - kind of depends on the median price of a suburb or value of a property.

Cheapie - kind of depends on your own profile.

My IP average is about 450K. So a 200K IP is a cheapie but it is not cheap if the value of the property is 180K.

 

Yes I agree with this too. Though I would go so far to say that a cheapie only qualifies as a cheapie if it doesn't require large sums of money to bring it up to scratch. Then it's cheapie status could be at risk depending how much you have to spend on it.

 

Not this... although you may call it "dopey" http://www.domain.com.au/news/young...ion-by-the-skin-of-his-teeth-20151024-gkhijw/

 

To me a cheapie isn't something that is cheaper than other comparable houses but something that is simply cheap. The only distinction I'd draw is between houses and units.

A cheapie house is sub $300,000
A cheapie unit is sub $200,000

Often (but not always) they are high yielding properties in low SES or regional areas.

For example if someone said they owned 10 properties, but someone else countered that they were all chepies, this would indicate to me that the total value of the ten properties is low; not that he has a $10 million+ portfolio with all properties purchased under value.

As I have seen the word used in similar contexts on this site (particularly in relation to comments about that Nathan Birch guy) I can only conclude that cheapies, to make sense here, must mean non-expensive properties disregarding area. So there is no such thing as a cheapie in Toorak no matter how far under value you purchase while Nhill in North West Victoria is almost exclusively a town of cheapies, no matter how much over the value of the property you pay.

 

I'm investing in metro areas only. I had only sunk money into the Sydney property market between 2005 and 2014 and nowhere else.

Because of this, my definition of cheapie was units to about 450k, but even with that amount you would really struggle to buy a 2 bedroom unit in Parramatta. (Note, I almost bought interstate a couple of times during this period but those deals didn't proceed to settlement).

But then this year I looked and bought into Brisbane and I will soon to look into Adelaide... my definition of cheapie is completely recalibrated because of this.

So it's really dependent on the state... which is why I think... Brisbane is cheap. Adelaide is cheap. Because you could pay triple those prices in Sydney...

On the other hand... My sister has her cheap Wagga (Mt. Austin) rental house but its cheap because of no demand. Cheap there is not value. Cheap is a poor purchase there. So don't think if its cheap then it represents a good buy by any means...

 

I am glad we cleared that up then !

 

Cheapies have reasons for being cheap. it has to be put into big picture/context to study. I can think a few reasons for it:
1. over supplied type of dwellings
2. lots of undesirable elements/demorgraphics
3..outskirts away from job centers/corridors
4. shrinking or population and diminishing industry sector
5. poor location, in the middle of nowhere and too small to sustain itself by industry wise

1 can be corrected due to shortage of building during the next few years, developers have to make money. natural market force. They will build less.
2. In growing cities, more people will move into or encroach into those suburbs because they have no where to go due to affordability issues. The "bad" will be diluted especially if it is closer to the CBD. People can tolerate certain "badness" to swap closeness to CBD/convenience.
3. In growing cites, satellite CBD, local industrial hubs will alleviate this issue

Cheapies due to reasons 1 to 3 are ok. The price will comb back( call it volatility). Cheapies due to reason 4 and 5 are questionable.

Just personal though.

 

I can say I totally felt the same as you after I posted it lol.
But hey, it's deadset true...

There's "cheap rubbish" that should never be bought as it wont capital gain in a long time, "cheap good" that is well located and I'd say, go for your life. And "cheap" because you're from Sydney and everywhere else in Australia is simply "cheaper".

 

450k unit a cheapie.
Your funny.

 

That's Sydney for you...

 

Its a different universe.