NSW First investment property, budget up to 650k - Sydney suburbs or regional NSW?

Hi all, I’m looking to break into the property market to buy an investment and have a budget of up to 650k. I want to buy a house, not a unit.

I’m a bit stuck as to whether to buy in Sydney or go regional. My budget will probably only allow me something in the Penrith/Blacktown/Richmond area. Otherwise was thinking regional NSW, maybe something like Orange, Armidale, Maitland, Newcastle surrounds, but it’s more difficult to get an understanding of the market as I don’t live there.

Obviously I want capital growth, but also need the rental yield to cover a solid portion of the mortgage repayments as I will be ‘rentvesting’ and have a few other life expenses coming up over the next ~3 years or so I need to save for (eg wedding). Ideally a set and forget type arrangement would be good, and I hope to one day use the equity in the property to buy a PPOR in Sydney (5 years or so, with my partners IP too).

What would you do in my scenario? Also what are some good resources for researching places in more depth?

 

Of your 2 options, I would go Sydney suburban, though I don't know what you can get for 650k right now...

Next pick is Melbourne suburban houses, though the rental yields are very low.

 

Welcome! Sadly you won't find a lot of houses in your price range in the Sydney catchment. Richmond isn't really Sydney. Also, to get a high rental yield will be challenging. Not saying it can't be done, but will be hard to find. Try postcode 2770 and Campbelltown.

 

Sydney has boomed in Recent years . So has Melbourne .

I’d be going “ nsw regional “ , somewhere in brisbane .

why ? Brisbane has underperformed for the last ten years.

When we last bought in Sydney , it had been underperforming in the preceding 10 years and we did well . As an investment I wouldn’t be buying in Sydney . We’re invested in brisbane and I expect to do well in the next 2-4 years .

if you can find a well located regional area in NSW which has a well balanced economy that hasn’t moved up significantly , that would be a possibility , but good luck .

cliff

 

Some of my friends have talked about Armidale a lot for the positive cash flow stock but personally I am not so sure about the prospects of serious growth in that area.

With $650k you can buy a decent house in Orange - but that budget may become insufficient if you don’t act quick. It seems that the people around Orange have good purchasing power so there is still room for good growth.

Otherwise, as said in another post I think Tregear and Whalan would be okay too, mostly because I can see the boom of St Marys having strong potential of lifting prices across the board in the near future, including these more “affordable” suburbs.

 

Let’s compare 2770 ( includes Whalen and Tregear) with 4114

In the last 10 years 2770 has gone from under 300 to around 600 .

4114 has gone from 300 to around 300.....

I’ve researched past cycles and seen what’s happened over the last 35 years . Every cycle I’ve been able to access data for has shown those types of bottom end suburbs reaching similar price points.

Yep , Sydney is booming and 2770 might go up in the short term , but the potential for a significant price rise is IMHO , much greater in a post code beginning with a 4 compared with a 2 .

tassie’s going well but has already gone up 50 % , Adelaide starting.

If I was given the choice of investing in Sydney or nsw regional , I’d be going a lot of read each on regionals , but I’d probably have every other state except Victoria ahead on NSW .

cliff

 

I absolutely agree, however most newbies won't want to go too far from their comfort zones.

 

agree , but unless the options are pointed out , the OP won’t be able to think about it .

Cliff

 

Hey Cliff, based on your previous experience when do you expect boom like growth to start hitting Logan Shire? Sure, parts of this huge LGA are currently moving along nicely, but I wouldn't say they are booming- whereas many BCC Suburbs are literally booming. Late 2021? 2022?

 

Maybe it's different this time?

Lower socio-economic suburbs in Adelaide and Perth have done sweet F all for 10 years as well. These suburbs in Adelaide and Perth are also only around 200 to 200 and 300 to 300. Brisbane does have higher population growth but you could have said exactly the same thing in 2014/2015 about Logan and it hasn't performed much since, particularly in the 4114 postcode.

Time will tell. I'd still prefer to invest in Brisbane suburbs than NSW regional though. Can't see 650k even getting a house in Sydney these days though.

 

Thanks everyone for the replies so far. Sounds like I’m running out of time for Sydney but there might be some pockets left around Mt Druitt and St Mary’s.

I found these properties in the North St Marys area and surrounds that are close to budget. What is everyone thoughts on these? What should I be looking for / looking to avoid in particular?

https://www.realestate.com.au/property-house-nsw-north+st+marys-136212770

https://www.realestate.com.au/property-house-nsw-colyton-136326050

https://www.realestate.com.au/property-house-nsw-north+st+marys-136380346

https://www.realestate.com.au/property-house-nsw-whalan-136404558

https://www.realestate.com.au/property-house-nsw-tregear-136254266

There are also some properties closer to Penrith that are in my price range, but what are your thoughts on potential for growth?

https://www.realestate.com.au/property-house-nsw-penrith-136395870

https://www.realestate.com.au/property-house-nsw-penrith-136333490

https://www.realestate.com.au/property-house-nsw-werrington+downs-135992654

 

Also this one at Lethbridge Park - huge block

https://www.realestate.com.au/property-house-nsw-lethbridge+park-136230558

 

A friendly message. Sorry it might sound harsh.
In general, if you want forumites to compare 10 properties for you, it’s better to engage a BA.

Forumites tend to like to see when the OP does their homework first, maybe narrowing something and comparing 2 or 3 properties, rather than an OP dumping random listings with no obvious thought process to be seen.

You might be lucky and have someone look through all the listings for you and give you their feedback, but I wouldn’t expect them to be doing this groundwork.

 

well my thought process was:

- North St Mary’s, Colyton and surrounds
- Within budget
- Decent sized block around 600m2
- Something that doesn’t require renovations to make it liveable.

My question then to the forum is (and this is coming from a total newbie), what are the signs of something being a good vs a bad investment. For example one of those properties is a 700m2 corner block and it seems that the property is towards the back of the block with a huge front yard. Does that mean it would be difficult to build a granny flat on there one day? Another of those properties already has a granny flat on there already. And then I also asked in my OP, what are the resources available to do extra homework? Of course to go and inspect myself is one thing, but how do I know what the tenants are like in these areas, how do I research upcoming commercial development in the area over the next 10 years or so? What are other key things I should be looking out for?

Sometimes when you’re just starting out and “you don’t know what you don’t know”, it can be difficult to ask the right questions in forums like this.

 

I'd agree . Only reason I mentioned it is because the OP asked for a comparison between Sydney and regional NSW .

There is a time to buy in Mt Druitt / St Marys. IMHO, nows not that time and I think Skater who's being investing there for ? around 20 years seems to agree . Last Cycle we were buying in Mosman / Manly while Skater was buying 2770 . We both did well . '

Not sure when the boom will hit . If I wanted to get an idea , I'd pick three to four areas moving in from Logan the city and then watch them carefully .

The recent uptick in logan has got to goodna , but still got a long way to go and it's busier but not BOOOM yet . Still time to buy and pick up most of the move .

Cliff

 

Then you read , every thing you can . There are posts here and on Somersoft , going back 20 + years many involving posters on this thread. If you've in Sydney , there are meetups including one run by skater .

There are lots of ways to invest and people in reality are telling you what they would do , which might be different for each person and might be different to what you should do .

Cliff

 

Those price guides look low.

this is what people mean by doing some homework first. You mention areas that is above your budget. This is something a search of sold properties will tell you.

so people spend time feeding you basics that you could google. Thats not high value to you.

 

There are sold properties in North ST Marys that sold around the 650k mark back in March. More recently, these sold property prices are starting with a 7...

In Tregear, Whalan, Lethbridge Park etc. the recent sales are much more comfortably within my budget as another poster pointed out. Rental return appears to be worse off though, around $350-420 per week. Something for me to consider.

Now how do we go about accessing data and information on the quality/reliability of tenants, projected growth, commercial development within the area, determining which properties are a good investment vs bad based on the unique qualities of that property... alternatively, other areas in NSW that aren't on my radar that could be deemed a better investment

 

Have you considered a dual or triple key dwelling in regional NSW, or elsewhere?

If you choose a solid location and look at dual or triple key dwellings then you may enjoy both positive cash flow and capital growth.

Perth is also looking rather attractive atm with the majority of properties cash flow positive that are at the medium house price (currently 490K) or below and poised for more capital growth in the near future it seems.

I'm actually meeting with builders tomorrow who are rolling out triple key dwellings with 12 to 15% rental yield and seriously considering attaining one if the numbers fit and also offering it to my clients if they are interested.

 

Analysis paralysis is also something to watch out for.