NSW Is Kellyville/Norwest a good area to buy

Thanks Kate, my perception with King Langsley and Prospect etc. is they offer good value in terms of land but are not as desirable as say The Ponds, Norwest etc. I meet a lot of young couples with 250k+ incomes etc. and they would never goto those areas. They would however, happily goto more desirable areas with half the land size and newish fittings etc.

 

The reason I think there is capital gain here is because these townhouses have been valued at well above 800k+ a couple of banks a few weeks back.

 

Depreciation in a non-cashflow deduction. Allow 1/3rd + of the tax loss as a tax refund.
Our estimator may be a better and more diligent way to assess the true cashflow cost (it does all the work for you)

 

But they are selling below value ? Thats illogical. What you willingly pay is likely to be fair value.
$760K + duty + legals = $792K

After 5 years the costbase would be approx $745K. Even if the property doesnt rise in value you could have a capital gain. You need to understand that the costbase erodes with tax deductions. Capital gains and increased value (growth) are different things. Investors should target growth

 

Thank @Paul@PFI ..yes understand that costbase will erode..The reason for selling below market value is I heard they are in liquidity crunch and bailing out..

 

Sounds like high risk. As others have said - look at the property cycles. Sydney just went through a boom and what are the chances of similar happening over the next 2-3 years?

I would review what you're wanting to achieve / your goals. What you want to achieve will be the constant in your decision making. There is more than one way to skin the cat.

Save yourself the pain and educate yourself.

Look at what's actually possible for you - speaking from experience (that's what most people miss).

So, @Alec, what will property ultimately do for you?

 

Buying something loose money to pay less tax is always a bad strategy.

Goals must be better than this.

 

Alec, you have received the world of advice from people who have nothing to profit from your purchase or non purchase.
Many of the items you state as facts are impossible to believe. Especially as there are hundreds of years of experience from the highly qualified people on this forum.

1. The amount of strata levies are low. Unless it is community title. This is a trick played by selling companies on the inexperienced.
2. You talk about a tax accountant. Is this the accountant that does your tax every year and is familiar with property, or are you talking about a tax accountant that has not been appointed and paid for by you.
3. You talk about a 2-3 year turn around. This is impossible and no one that I know would say it is a possibility. At present I am 40% cash as the market is still dropping.
4. Is the valuation a generic valuation or something that has your name and the exact address of the property paid for and arranged by your bank.
5. Are you dealing with a Real Estate Agency or a company appointed to sell this property?
6. Is the property completed or off the plan?
7.What have other real estate agents shown you in comparison?

 

The Ponds has already lost value and will continue to loose more. New construction = shiny things = younger couples buy into it. Doesn't make it a great invetment.

There is no conspiracy here to stop you from "making imaginary money". Take a step back and re asses

 

This project is a row of townhouses. They don't have any common services like pool, communal spaces etc. Perhaps thats why strata is low @ 1000/annum?
The tax accountant is the one who does my taxes every year and she knows about properties too.
The valuation is the one for my friend's property.
Dealing with a real estate agency appointed to sell the property.
The property was off the plan but completed now and ready to move in.

 

well, to save tax in short term, but in long term, wanted to have an income stream so that I did not have to rely on my job for an income and beyond that leave some inheritance for kids so that they don't have to struggle too much for property in expensive Sydney market.

 

So Alec, you seem pretty convinced on the merits of this as an investment - why do you need to ask us all the question in the first place?

Just wandering into this thread. Despite pretty much unanimous feedback advising caution, you still seem keen to go ahead. So you may as well???

 

Hi birdseed, I really appreciate all the feedback so far and am taking this into account. I was explaining initially because my position was not very well understood. I have almost made up my mind not to buy this. But then I look at suburbs like Prospect, Lalor park, Toongabie etc. and I do not have any freaking idea what to buy there. I heard that the quality of tenants is a big issue there.

 

Bella Vista is off 10%.

As to the future who knows. I would suggest a free standing house around quakers hill or acacia gardens. Or a duplex at a lower price point if you must buy soon.

There is no need to rush.

Edit. Forget your 2-3 years. If not expecting 10 years of holding on P&I terms invest else where.

 

People understand your position better than you do, and your not nearly as special as you think.

You are looking at this as a newbie high income fhb. You think the value is in the shiny buildings. You think demand is there because all your clueless newbie friends think the same way and that the tenants are better because they are your type of people.

End of the day its your money. Maybe you would do better in 20 years buying here, than if you never buy anything because you cant bring yourself to buy anything you cant see yourself living in and assume anyone who makes less than 6 figures will trash the place and run.

 

Lalor Park and Prospect. Chalk and cheese. I live on the border of Lalor Park and it's a combination of drug addicts and nice families. Prospect is a safe, family area. But how "nice" a suburb is won't affect whether it's worth your while to properly crunch the numbers. If I could have afforded it 10 years ago I would have bought a third IP in Lakemba. Everyone in my investment group looked deeply shocked and said "but who would want to live there?
I said everyone who wants to be within walking distance of a very beautiful mosque, Australia's largest.

It's had far more capital growth than the properties I did buy! (The suburb, not the mosque, although that's probably worth a quid now!)

 

Did you check out Quakers hill? You dont have the shiny stuff though but good value and yet close to Norwest

 

Hard-hitting but that's some perspective, thank you

 

I really like Quakers Hill. I live next door in The Ponds. They have some nice big properties but the prices have stayed much the same. Has there been some capital growth in Quakers Hill?

 

Alec, how long have you looked at the property market? Do you know what has happened in the last 10 years in Sydney?