NSW House vs Apartment-that old chestnut!

Hi Guys.
Wow...just found out about this forum..and i've been reading posts non-stop! So many great threads and amazing people with heaps of knowledge. I'm looking for my next investment in Sydney and wondering if anyone can give some input. Its that age-old debate: well-placed apartment VS outer suburb house.
I'm thinking of purchasing up to $650K. I was either thinking of a 2bedroom apartment in a gentrifying suburb like Ashfield/Gladesville OR a townhouse in an outer suburb such as quaker's hill/blacktown.
A bit of background: I have 2 IPs (apartments) in westmead/parramatta and my PPOR which is a house in Kellyville.

Any words of wisdom will be greatly appreciated

 

Hi @pumz99

Welcome to the forums Here's my two cents on your scenario.

It would be dependent on what your investment strategy is. Rather than focus on what type of dwelling you are after, should the focus be on what you are after from the asset? That is, is it capital growth or is it yield? Does it suit your current strategy with having 2 IPs apartments already?

Land Tax could also eat up on returns, especially that you have 2 IPs and planning on a 3rd in NSW. Something to think about.

Cheers.

 

Hi@KayDee

Thanks for that. This would have to be more of a capital growth play. Yep land tax is definitely something to think about, I think with a 3rd property in NSW I will have to pay land tax-currently I do not. Do you feel more the townhouse if I'am going down the capital growth pathway?

Cheers.

 

I'm biased, because I'm friends with strata managers who boast about how much money they make for how easy a job it is they do day to day... and allowing them to browse and post on their personal social media 2-3 hrs a day every working day.

Building strata are being outsourced to entities specalising in strata management, ie. they are run for profit. They've come a long way from the original intention of strata management, to manage the building for the benefit and convenience of its occupants. Therefore you'll see unregulated uncapped increases in strata fees every year, well beyond inflation, well beyond the cost increases of any other aspects of property ownership. Strata fees being higher than council rates are a joke - consider how much the council is financially responsible for versus a building's strata management - and yet here we are at this point in time when the majority of buildings have strata fees well in excess of rates. I loathe any property with strata or common charges and would keep well away.

OP, since you're in Kellyville, you would know presumably the locations closer to your home than the ones further away. I would suggest Quakers Hill, Schofields, Rouse Hill or anything along that new corridor from Rouse Hill towards Marsden Park that's undergoing massive development right now for investment opportunities. I'd also suggest Marayong, Lalor Park, Doonside for the more established areas that are currently viewed as 'dumps' and 'would not choose to live there', as that second airport out in Badgery's Creek brings St Mary's as a transport hub and anything nearby on the western railway line will see some gentrification and price growth in the next 5-15 years.

 

I would never choose a unit over a free standing house on land. As advised above go west towards St Marys and surrounding suburbs. That is where the smart money is at the moment in anticipation of all the investments and gentrification happening out that way.

That is where the biggest capital growth will be. Western Sydney and Parramatta is going to be the biggest CBD we have in several years after looking at the plans for it. I just went to Parramatta square today geeez what a transformation. Unbelievable whats happened there.

 

Hi guys..thanks all for the advice. I agree between parramatta and penrith there will be huge growth in the next 10-20 years. I recently went to parramatta too..and damn..there is HEAPs of new development going on. Unfortunately a free standing house in parra would be >1mill and a townhouse around the 850k mark. You can pick-up a 2/1/1 unit older style in a small complex for between 550-650k. But i'm not too sure about the growth due to a large pipeline of units coming that way in the next few years. I guess the good thing about inner west such as ashfield is that it is pretty land-locked and there is not a barrage of apartments coming that way.

 

Not a safe assumption to make at all. In Burwood a lot of 5-6 story buildings are being constructed on only two houses worth of land. Doesn't take much land to build up.

 

Get something with land content, cause that’s the factor that’s scarce. So a house, a duplex or townhouse, a villa or something in a well located low rise unit block. Higher density property will keep being built in Sydney over time so something with land content will be more desirable to own.