Investment property in Western Sydney (<$700k)

Hi All

By way of background, I am looking to buy an investment property with a budget of up to $700k max. While I can afford up to $700k ideally I would want to buy something around the $450-550k mark.

I have been doing inspections in a few suburbs for about five months now - Padstow, Greenacres, Bankstown, Auburn, focusing on apartments or townhouses that are built 20+ years ago (because of concerns regarding poor workmanship in some of the newly built).

What I am hoping to get a second opinion is whether apartments in these suburbs are worth investing (or should I look elsewhere?) and if you have any views on these suburbs? I am a bit lost now and any guidance would be much appreciated!

 

In addition to the above, I am also hoping to understand whether, if given the choice, whether it is better to buy a two bedder or a three bedder? I feel that two bedder may be easier to lease out; but three bedder may enjoy better capital growth (though I might be completely wrong!)

 

Why are you looking for units, when you can get a house for that budget, a little further out?

 

I am hoping to get some rental income out of this investment property and I feel that if I buy somewhere far I might find it difficult to rent it out. Further, to get a house at my limited budget would mean that I need to look into areas that are far from train stations/inconvenient to people who wish to travel by public transport - and therefore hard to rent out.

I am not too fussed about the yield for now because ultimately my income should be okay to cover the mortgage for the investment property; and I am just a bit loss as to how I should strategise this. Grateful for any feedback and comments!

 

There are people who want to rent everywhere. Just because YOU think it's inconvenient, doesn't make it so.

IMHO, it's always easier to get a tenant in a house, rather than a unit. Plus you own the land, and don't have to pay strata.

 

Any thread about Western Sydney investment and <$800k there are only a few suburbs I would be looking at due to the amount of money going into them or near them.

There are NO other western Sydney suburbs having this much investment going into them that is comparable to the suburbs below. St Marys is going to be a MAJOR transportation hub and total will be 10s of billions of dollars in both government and private investment going into the area now and within the next 5-10 years.

In saying that though just like the metro many aspiring investors don't jump in until the bloody constructions are finished and by that time its too late. The places have grown immensely already.

The news is already out about the below suburbs. Every dick and harry who knows and has confidence in the potential are buying up anything and everything as we speak. Houses selling sight unseen and within 1-2 days of listing. Crazy!!

1) St Marys
2) Mt Druitt
3) Colyton
4) Tregear
5) Willmot
6) Lethridge Park
7) Oxley Park
8) Werrington
9) St Clair

 

How do Tregear and Lethbridge Park differ from the likes of Shalvey, Bidwill, Hebersham etc?

Willmot was PERCEIVED to be the pinnacle of rough houso (or maybe it was Airds/Claymore). Apart form being more exy than previous years, have the likes of Willmot actually changed ie % of OO getting higher every year?

 

I personally believe the entire of the 2770 postcode is changing. Have you been out there lately? Noticed how many private developments going on? New townhouses being built everywhere. More and more apartments coming up. Open homes are packed last time I went with young first home buyers.

Willmot houses there are looking clean these days. When I drove around a few weeks ago the houses are presenting quite well. Yes there are rough ones still around but you need to see past that. Compared to say 10+ years ago BIG BIG BIG difference.

Willmot is right next to Ropes Crossing. A complete brand new housing estate. Literally its like walking across the street. Houses there are $800-$850k+ some. Their kids shares the same schools, same shops, same sporting activities, same everything.

ALOT and I mean ALOT of ethnics moving's in there. Indians, Pakistanis, Philippines and other south east asian nationalities. Compared to living in the slums of Delhi, Willmot is paradise!!!!

There is flow on effects as well. St Marys becomming a major transport hub is attracting big money into the area. Heck I mentioned in another thread I saw a Ferrari 488 GTB sitting infront of St Marys post office. I could not believe my eyes. LOL

 

Does streetview count?

 

Someone's trying their luck here
https://www.realestate.com.au/property-house-nsw-willmot-135477906

 

It will sell - just watch it.

Ropes crossing is $800k+ plus now. Its not possible that one side of the street is $800k+ and the other side is $550k. Not possible.

Crazy prices being achieved in all those areas now. FHB got no other choice. They cant afford better places.

Its all relative. These prices seem crazy for ppl like us who picked up houses in these areas for $200k. But in terms of todays dollar figures $600k is actually very very cheap for a free standing house on 600sqm of land in Sydney.

 

Thanks @skater! Another concern I have with a house as an investment property is that while there is no strata fee I will still have to pay for the general repair and maintenance which may be even worse (I don’t have a lot of spare cash and don’t have contact in the industry who is able to fix things cheaply..). The property I am living in at the moment is an apartment so it would be grateful for any guidance if my thinking is misconceived.

As an alternative would a townhouse be a okay investment? I find that in the areas I am looking at townhouse often attracts a $100-150k premium (against apartments) - not entirely sure if that’s justified. For instance, this one is Padstow the townhouse looks pretty good, 2km from the station (so you’d need to drive), but the agent asked for $780k which I thought was ridiculous for the location (I think it’s worth high $600s). What do you (and everyone) think?

https://m.realestate.com.au/property-townhouse-nsw-padstow-135324986

 

Having units/houses in my portfolio, I agree that houses are much more preferable. I still hold those units but early on in my journey, pivoted to houses.

 

Willmot is still the ugly duckling. It's got a higher percentage of Housing tenants than the others.

 

Willmot has it's own primary school, as does Ropes. Catchment for highschool for Willmot is Shalvey, which is walking distance. I think catchment for Ropes is St Marys.

There are a lot of rough ones still in Willmot. You're only seeing the ones presented for sale. The area has slowly been changing, but it's not happened in a big way, all of a sudden. It's slow, and will remain so for a while. Housing are slowly selling out the dogs from the area, but it is a trickle.

The demographics are changing as the new immigrants don't see the stigma that the Aussies do. Lots of Syrians as well as Asians.

 

For an area to change, you need houseproud OOs, not pesky investors like us.

 

OMG!!! They couldn't even mow the lawn.

 

Well compared to Aleppo, Willmot looks like Point Piper.

 

Agree. But you've been around a long time. This EXACT same thing has happened to St Marys and Mt Druitt. Sub $200k houses and Mt Druitt was rough as guts when I was buying my very first properties there.

Now they are selling for $800k+ a pop.

The thing is today is vastly different from 10+ years ago when we started. The rate of gentrification will be faster, much faster. There has never been in the history of these suburbs this much interest and investment dollars going in. 10+ years ago there was no a single cent going into St Marys or Mt Druitt, hence their surrounding suburbs had ZERO chance of gentrifying back then.

Today - well from my last count over $11Billion dollars of private and government investment over the next 10 years. Plus more than 50,000 jobs for the entire area a lot of it due to the new transport hub over the next 10 years.

I see plenty of potential for the entire area. Not trying to boost my ego but when 99 out of 100 ppl advised me not to buy St Marys/Mr Druitt properties for sub $200k I did not listen and its worked out absolutely superb for me. I'm so confident in these areas that if I could get money I'd go all in.

 

To be honest, most newbies gravitate to units, as they think this what an 'investment property' is. If you are concerned about maintenance issues, keep some funds spare in an offset. I find that maintenance costs on a house is less than the strata of a unit. Remember that if you are paying $800 a quarter in strata, that is $3200 over a year.

Remember, land appreciates, buildings depreciate. How much land value is there in a unit?