House in Wollongong

Hi everyone,

I have just recently discovered this forum and this is my first post here.

I am a life long Sydney resident who was trying to buy a house for my wife and kids after selling our 2nd property (started with a unit, then a Townhouse). I was looking to buy our forever house, a run down 2 or 3 bedroom to renovate over time but I'm now aware that this will never happen as we can't compete in any of the areas we want to live and I know Sydney will only keep rising big time!!!

So the Sydney dream is over and we will continue to do what we said we would never do and rent. It's not great but we get to live near our family and within an hour of work. So now I need a different strategy.

I am thinking about a house outside of Sydney as an investment. Wollongong central seems like a good option with its proximity to Sydney and amazing homes can be had there for well under our Sydney budget allowing us to pay expensive rent. What are peoples thoughts on this beauty:

53 Rowland Avenue Wollongong NSW 2500 - House for Sale #126831702 - realestate.com.au

Apparently $900-950k which blows my mind for a home of this quality so close to the city centre and rail to Sydney. It's actually been on the market for a while which surprises me, am I missing something?

It seems like a decent long term investment that we could hopefully sell in the future to be able to buy a home somewhere quiet, probably another state, since Sydney wound not be possible for us to retire to ever.

Thanks!

 

Looks like it was built in 1950. The tiles in the bathroom may be asbestos. Wiring, driveway, bathroom and plumbing all may need updating. The house will likely have other areas with significant asbestos materials. I would certainly order a building inspection before making an offer. For that price building in Woolongong might be a better bet? The price certainly seems to be in the current market range and is close to the hospital.

 

Howdy - welcome to the forum. Its a wealth of knowledge here. If you want to invest in the Illawarra there are obviously lots of things to consider. This property looks cheap because of your frame of reference in Sydney. Everything looks cheap if your comparisons are priced higher. Whether that makes it a great investment for you and your goals is a bit more complicated.

Certainly, nothing wrong with investing in the region (I am actually a big fan) but it has also had significant growth so hunting for value in the better suburbs or even might be worth checking out more affordable areas in close proximity to these areas priced even lower.

You do have to consider rental yield and serviceability as a major issue if you want to use investments to leapfrog you into future PPOR or retirement plans. Do some goal setting, decide on long-term targets and then build a portfolio that is best placed to get you there.

It may well be worth considering cash flow in your equation if you plan on buying more than one property as the 2nd and 3rd loan will be harder to get than the first and you need to budget for future interest rate rises also. All the best with your search if you do the research you won't regret it!

 

Cheap compared to Sydney, yes. But for an IP, look at rental yield and capital gains prospects. Neither are likely to be better than Sydney.

 

depends on where/what you are looking at

 

Doesn't it always?

 

of course but assuming you get that part right I have to say I think it is more likely to find more affordability, in some cases better cash flow and capital gain potential too given how topped out Sydney is.

 

You don't think the Gong is topped out? At least everything north of the steelworks is, don't really follow what's going on further south.

 

Agree northside is pricey but south you can still pick up a home on a block with future redev potential close to beach under 600k if you want. Good potential in those.

 

I'm sure you can. But there's no economic fundamentals driving growth down there. The boom in the northern suburbs was mainly due to Sydney money (now rapidly evaporating) but south of Coniston? Too far from the big smoke to commute, too rough for well-off sea changers, too many mega developments and too few jobs...

 

Herein lies the beauty of property investing. We don't all see markets or opportunities the same way and someone's trash is another's treasure.

 

Very poetically put

 

Thanks for the reply, I should point out I've researched this house (it was actually recommended to me), it has been completely gutted, rebuilt and extended, there's nothing really left of the original house. Its amazingly clean. My understanding is that the building inspection is excellent for this property but I haven't actually seen it.

The thing that originally stood out to me is that its only a few houses away from Mangerton which is considered a premium suburb in Wollongong I believe? That seems to have higher prices than Wollongong itself.

This combined with the size and quality of the home itself, closeness to Wollongong station, centre of Wollongong including shops and restaurants plus the hospital seemed to make this property excellent value to me? Thus it has my interest. However is lack of interest concerned me since I don't know Wollongong that well.

 

Thank you for your reply. You're quite correct, my views may be skewed by only having looked at Sydney until a few months ago. This sort of money is worlds away from the money required for a property with the equivalent fundamentals in Sydney but Sydney is Sydney after all. I am told that this property may rent for $700-$750 per week which seems good compared to Sydney to me? However I was looking at buying for a home rather than rental aspect so I may be wrong. Maybe need more research on that one. It just struck me as a property that should do well longer term.

 

That's certainly not the case where I was looking in Sydney, yields are terrible but it may be better in suburbs I haven't considered? Say $900k buy price for $750 per week on a good condition house that has strong fundamentals for the future? Isn't that decent compared to Sydney? Anything in my price range in Sydney that I looked at to rent out would be a unit on a busy road which I can't see great capital gain on but I may be wrong. My preference is certainly houses, my experience with units is not good.

 

The asking price seems a little high (above the median for next-door Mangerton) and an anticipated rent of $750/week quite optimistic for the area it's in. You need to look closely at comparables and evidence of rental value to be sure. Also, in the Gong, always look closely at flood risks: not saying that's the case there, but always worth checking out.

 

Thanks for the response, I had done some quick comparisons and for a 5 bedroom (including the room on the lower level), 2 living room, 3 lug + carport home with a decent enough bit of land (although on a slope) I thought it was well priced, even for Mangerton. The rent number given to me seemed right for the area too but now you've said this I will do some more research to confirm that was right.

 

@JB40 it has some social housing nearby. Just FYI that may be why it is slow in selling. Not saying you can't/shouldn't buy it, just be aware of what you are actually getting especially if you ever plan to live in it.

 

If you spend a little more, you will see a few options in Engadine/Heathcote.
Couldn't imagine paying that price for that house in Wollongong.

 

Then I would read the building inspection, spend time in the local area, and go from there. I do not know the area well. Research, research, research! It seems that the area may be flat with risk of receding in the new year according to other responses on this thread.