FHB struggling to decide on investment location and strategy

Hi All,

Bit of a lurker, first time poster. Would love a point in the right direction from those more experienced than me!

Title says it all, FHB struggling to take the plunge. I've been monitoring and going to open homes for around 5mths now and am a little anxious that I'll get priced out of Greater Sydney if I don't make my mind up (not FOMO, just conscious of my own budget and where prices are going).

I'm struggling with making a decision as I'm noticing the quality of properties that are coming on market hasn't been great though they're selling for the top of my price range and beyond.

I'm starting to think maybe it's me who is being too picky, so I've come here for objective thoughts on my thoughts/aims vs my circumstances and current market. I've put some details below for context, happy to add more if need be.

Key questions:
Am I being too picky/over thinking? Suburbs I've missed? Would an apartment be a better option at this point?

Personal situation:
Mid 20's, living in Sydney (at home at present, no rent), no dependents, no other debts, single income (low six figures salary).

Investment aim:
My first few property purchases will be for investment. Over the longer term, my aim is to build a diverse property portfolio of mixed assets to retire off of.

What is my budget:
$700k approx budget at present (will use FHB incentives).

What type of home/land:
Mainly looking at a 3/2/1 brick home (want to avoid old fibro homes with asbestos). Open to light renovation. Ideally block is above 500m2 (flexible). Not looking to buy at auction.

Where have I been looking:
Mainly Glenmore Park and Penrith, also a little in Merrylands. Haven't looked at Seven Hills, Mt Druitt, Blacktown, St Mary's etc.
Starting to look around Central Coast and Wollongong areas as I think they present a more unique value proposition at similar price points to Western Syd (beyond Parra).

What strategy am I thinking at present:
I feel I'm leaning towards a capital growth strategy as the starting strategy, but I also understand the importance of balancing growth with cashflow over short/medium term (once first property bought).

Scorpio.

 

Hi Scorpio

I’d consider applying for an IP loan and forgoing the FHB incentives. This may allow you to move up a little in price and out of the FHB territory ($650-800K) and you might find the competition a little less. The FHB category is just manic at the moment.

 

I agree with you mate.

Im from Sydney too and the new apartments I've looked at along with their prices aren't justifiable to me. I'm looking in areas outside of Sydney.

Just saw a Fb commercial for a Parramatta one bedroom apartment for 670k? Had to stop myself from commenting on that rubbish.

I wouldn't take forever to decide. I couldn't buy in an area I liked as the price jumped above me in 3 months

 

Do you even have 20% deposit? ‘I am not saying you need it, but being a single income and under 100k income. It does seems worrisome that you want to jump into 700k properties with both feet.

 

Some of the places you mentioned can get you what you want at your budget very easily. Those places have gone up in 3 months

 

Thanks all for your insights and commentary and happy Australia Day!

Thanks for the suggestion @Liquidity . Perhaps thats something to consider on my end, though I'd be hesitant to stretch it too far. Completely agree with you re FHB market atm though!

Thanks @Rolf Latham - agree with you that perhaps I've been a little picky. I'm not so much concerned about paying too much - I'm more concerned about the quality of what I'm buying in my price range in areas I've looked (from what I've been seeing a lot of low quality properties are just being offloaded to FHB who are blindly jumping in).

Would you mind elaborating on your final part of the comment re "other programs running above perceived value?" If I understood correctly perhaps you're saying I need to re-evaluate what I'm looking for OR I have commitment issues?? Which in both cases leads me to wonder if you've been speaking to my ex-girlfriend?! (I jest I jest). Welcome your thoughts!

Hi @Gen-Y - I'm sitting at just over 15% deposit at present, gross is over six figures but correct that net is under (damn taxes!). Understand exactly where you're coming from re budget vs income - like I said to Liquidity above, I wouldn't look to stretch beyond $700k. Mid 6's I'd be much more comfortable (in a mental sense at least), but even then know it's borderline where you'd want to be in terms of repayment vs salary etc. Perhaps I should look further afield and into regional areas? More bang for less buck etc.?

HA - yeah I get you completely @RonnyYil Property! Ridiculous! But if the people are happy to keep paying, they'll keep selling them!

Re your second comment, yes you're right that there are places within those areas that are within my budget. Some of them I passed on due to quality concerns but new ones come up every so often, so maybe missed a few as I've been looking elsewhere lately!

 

Must you invest in Sydney? The east coast have many choices in the big 3 city. Brisbane, Sydney, Melbourne to name the them.
For 700k budget - you can get into the middle ring of Brisbane within 10km radius and gets $500 per week rental. These aren’t your rough areas.
I am not advocating you to buy in Brisbane. But to keep all your options open.

 

Thanks @Gen-Y. Sydney isn't a 'must', so I see your point. I'm unfamiliar with cities outside of greater Syd (from an investment standpoint), but definitely not against the idea of looking afield. Will do some research!

 

Good for you, @Scorpion. That's awesome you're earning that much and so clear about what you want at your age. I'm jealous!! (in my mid 20s I was serving coffees for pocket change and living off steamed potatoes).

 

2 Dodd Place, Cranebrook, NSW 2749 https://www.realestate.com.au/property-house-nsw-cranebrook-135348018

9 Stockholm Avenue, Hassall Grove, NSW 2761 https://www.realestate.com.au/property-house-nsw-hassall+grove-135353490

42 & 42a Manila Road, Lethbridge Park, NSW 2770 https://www.realestate.com.au/property-house-nsw-lethbridge+park-135074514

 

Thanks @Schubert - thats really nice of you to say. I still have a long way to go though - and a lot to learn! As they say, it's not about where you start, its where you finish!

Thanks for posting these @Spad , I haven't really looked too far outside of South Penrith/Glenmore Park. Might need to get out and take a look around these suburbs!