NSW Investing for Cashflow in Greater Parramatta area ?

People,

I'd like to know what's your thoughts and comments regarding investing existing unit / town house in the following area:

Holroyd, Harris Park, Parramatta, North Parramatta, Westmead, Wentworthville

My goal is to have one or two IPs (existing one not OTP) in one of those area above since they are in the vicinity of Parramatta the largest Satellite CBD in NSW.

I've researched and scouting around with the following terms in mind:

P: Population growth as more and more people likes to live in the area
I: Infrastructure: The gentrification in Parramatta area has spawned numerous cafes and restaurant.
E: Economy: Lots of companies and Govt. Office now moving to the Parramatta area, plus 3 large hospitals are nearby in Westmead, Western Sydney Uni and Westfield is there.

Any thought and comments would be greatly appreciated.

 

Great area and big plans and $$$ in the pipeline at the moment. I live in the area and it is very convenient and has everything you need however as many would say the recent increase in prices may now have a big impact on your yields as you are looking to purchase for an investment.

 

Welcome back John

 

Holroyd = has no train station.
Harris Park = Potentially Over supply as alot of OTP is on the pipeline
North Parramatta = similar with Harris park and Parramatta. Also no train station.
Parramatta = Convinient, but Over Supply
Westmead = better option than the rest, as supply is very tight, infrastructure upgrade is coming. No major OTP in the pipeline. But prices has gone up significantly this year. Rental yield is now around 4.4-4.5%

 

Yes, that's what I thought so far. But for 4% yield that's better than under 3%, I reckon that it will grow up later on down the track to be cashflow positive... one day....

 

I wouldn't be worried about an oversupply in Harris Park or anywhere around there, really. However, that is not the way to go about getting a cashflow positive property. With those yields, it could be quite a wait.
You'd be better off looking interstate or regional for now.

 

So yes, it seems that you guys are correct. After reading the below Investment clock this month:


it would be make sense to invest in Wollongong and Brisbane area

 

Holroyd does have a train station - it's the area with all of the townhouses/units just north of Merrylands station. It looks like the land in between these units and the station is about to be developed which would make for an even quicker walk to the station.

 

I dont think Holroyd have a train station....

 

http://www.sydneytrains.info/stations/pdf/suburban_map.pdf no holroyd train station.

 

Holroyd is a LGA. Not a suburb. Few Suburbs within Holroyd are close to stations.

 

Walk distance from Holroyd to Merrylands train station 10-15min
Holroyd village is built next to train line!

 

For those of you that appear to be unfamiliar with the area, google Holroyd Gardens. See the streets between the park and the train line? That's holroyd estate.

 

..
It may be too late but I though I contribute with some simple numbers to save some poor soul who is looking to invest in Parramatta or anywhere really , Especially in OTP.


Median for an apartment is Pushing $600K by the time you tally up all the expenses.
Even at today's rates that is a $600 per week interest bill.
Add $50 for insurance and ad hoc expenses
Add $100 for Strata, council, water and management fees you are looking at least $750 PW outlay.
You can expect median rent if you buy median property so lets say $450. 3.9% gross yield.

But you have a $300 PW deficit!!! that is $15600 per year. How long will it take for the rents to go up another $300 or 66.7% in Parrammatta?????

Let me cover the Negative gearing too. If you are one of the lucky ones to be in the top bracket you can offset 46.5% of the loss, that is $7254.

you will still be $8346 out of pocket every year if all else remains the same. this is approximately $160 PW.

So if you are looking at investing for cash-flow you will have -ve cash flow as long as the rents stay below $610 pw. Let's call it a break even rent, it will have to be higher for investors on lower tax rates.

The only way to make money would be to have some capital gains when you sell eventually.

The people on this Forum are largely sophisticated property investors so this, back of the envelope, calculation is no news to them but still I hope it will help someone. In the no capital gains era we are entering it would be absolutely critical to breakdown the cash flows to a weekly or fortnightly level to make sure you can afford it.

Cheers

 

Do you mean no capital gains for Parramatta, areas at the top of the property clock above, or all property in Aus?

 

In my post I was referring to apartments in Parramatta. However, it would apply to apartments in most areas in Sydney and Melb. Properties with land component might fare better.

Cheers

 

Note that the original post was made in June 2015...

 

We have two IP in Guildford (part of Holryod LGA) next to Merrylands. When I did research on 2009, it was buyer market.. Merrylands popular shooting, bikies news from 2009, 2010, and 2011. But I can see this suburb stuck between Parramatta and Liverpool at that time was developing (still developing now ).

Rumour about Badgery Creek airport already in the air, as well as train station surround Baulkham Hills.. But for some reason we stick to that area, because the 'job'. Back then not many big company operate from that area. I was working with RTA - IT Department in Parramatta, and there is council discussion etc. So that information was part of my decision point.

From infrastructure point of view is great, but considering Syd market on the peak its better to invest elsewhere & visit sometime in the future.

Numbers if you interested :
#1 - 2010 - 3BR house purchase price $400k, Sept 2015 val was $800k. Rent $520/w
#2 - 2012 - 2BR unit purchase price $320k, Sept 2015 val was $450k. Rent $420/w
Nice depreciation on both of them.

 

Cool,

Many thanks @Numbers_man_numbers

 

OT, you still there or got shoved over to TfNSW and moved to Elsie/Lee St?