NSW First home will be investment later

Hi,

My fiance and I are currently looking to buy our first home in Sydney, which we plan to live in for a few years then eventually we will rent it out. So we are looking for something that will steadily grow as it will later be an investment. We have a low budget and look to find a 2 Bedroom apartment or house for around 360-500k. The suburbs we are looking at are:

-Pendle Hill
-Toongabbie
-Seven Hills
-Blacktown
-Parramatta
-Westmead
-Jamisontown
-Penrith
-Woodcroft
-Doonside
-Quakers Hill
-Marayong

Any advice on these suburbs? Ones to avoid, good investments etc?

 

What sort of mortgage are you thinking of getting? Loan features? Where are you going to live when you rent this out?

 

hi christopher how are you be probably looking at units in parramatta area north parramatta/harris park/granville late 400,000s in that range,in regards to doonside quakers hill/marayong mostly townhouses above 500,000. In regards Penrith would be a good choice lots of new apartments near the nepean hospital around late 400,000s. or you can look at brick walk up units 300,000-400,000. depending on condition and state of the unit.

 

conventional or fixed rate mortgage. Hopefully one where we can pay more than our mortgage without extra fees. We will live in Sydney but unknown where.

 

Thanks Riahi,

Do you think Penrith is a good area for investment?

 

yes penrith is a little further out however as you the nepean hospital is having a $1 billion upgrade and has Westfield ,also University of Western Sydney/Tafe Schools, near the major arterial roads M4/Great Western Highway and close to the future hub of Badgerys Creek.

here are some suggestions
5/20 Thurston Street, Penrith, NSW 2750
6/30 Haynes Street, Penrith, NSW 2750
1/49 - 51 King Street, Penrith, NSW 2750
52/25-31 Hope Street, Penrith, NSW 2750

 

You mean you will pay off some of the mortgage, then maybe buy somewhere else in a few years?

This is where a good mortgage broker would be useful.

Do you know what a offset account is?

 

For goodness sake DO NOT do this if you plan to make the property an IP in a few years. Put spare cash in the offset account as @Trainee alluded to. I second his recommendation that you see a good mortgage broker BEFORE you implement your plan.

 

I don't believe that there is any real capital gain in those areas to be had in the near future, some are selling for less than the current owner bought them for years ago! I would look at house and land, not a unit if you are going to keep for the long term.

 

Also worth considering the "other" costs too, especially if you're buying the property as a PPOR.

How easy is the public transport access? Will you need two cars (a car costs at least $100 a week). If you can live with only one, then that helps a great deal.

How long will the commute be? Could you do something else with that time that makes money?

Does the place have solar...access to parks, friends, schools etc..

What are the body corp costs?

All this extra stuff makes a huge difference to your well-being and helps pay the property off quicker.

 

I personally think Penrith is way too far out.... Think about transport and commute times. I don't know what work you and your partner do, there are some jobs in Western Sydney but for more options, you may have to commute into the city work.

 

North Pazzamatta...you can get a 2 beddie for 450-460k.

The other area is older units in Meadowbank...some selling under $480k for 2 brms.

 

I think we will definitely have an offset account, although with interest rates being so low right now its hard to weigh up the pros and cons of an interest only loan. It would reduce our payments by around $700 a month but once the interest only period is up with the risk of interest rates also increasing it would end up costing us $400 or more extra per month for the remainder of the loan

 

Although I understand the concept and its definitely something I need to put more thought into.

 

Try an example. You buy a place for 500 with a 400 loan.

In 10 years you save 200. Then buy and move to another place.

What is the difference between:
a) you pay down the mortgage to 200 and
b) the loan is still 400 but with 200 in offset.