NSW Plans to buy outside Sydney for max 600k

Discussion in 'Where to Buy' started by Fruitjuicante, 18th May, 2020.

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  1. Fruitjuicante

    Fruitjuicante Active Member

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    Hi all,

    I've been convinced in a previous post that Sydney is perhaps not as locked out to me as I thought.
    I was hoping to receive feedback on my revised plan to buy a property to live in, so I will give as much information as possible before asking my questions.

    Non-married couple.
    28M on 58k a year before tax.
    25F on 55k a year before tax.
    Both with potential to move up within the next few years. We do not intend to have children.
    I have been given more and more responsibility of late and am hoping to be promoted to a managerial role soon in a Campaign Operations type job.
    Girlfriend has just finished Masters in Public Health with a wealth of experience already in Sales; essentially second in command for a few years at a small business.

    We have, all up, 90k in savings (mostly mine), and are hoping to have 110k in two years to spend on a deposit, not including our safety net. We are also hoping that the housing market deflates in that time, even if a tiny bit, though the future is uncertain, as we all know.

    We are hoping to buy somewhere that is at most a 50 minute drive out of the city.
    We were looking at places like Horningsea Park, Prestons, St Clair, etc, that seem to be a balance of near our price range but also in a community that is pleasant and looks to have some growth potential.

    My goal is early retirement, and so I hope to buy a property to live in and to pay off as soon as possible. We are currently paying 400 a week in rent, and are still managing to save quite a lot, so don't feel that we'd struggle to pay off a mortgage of around 450-500k.

    My idea is to buy a place worth around 600k that requires minimal work, owns the land underneath it, and that does not incur any strata fees. I would intend to put solar panels on as soon as I had the money to do so, maybe start a vegetable garden. I would aim to pay it off in 15-20 years max, so I would want a mortgage that allows me to easily pay down as fast as I want with extra payments, if that is possible.
    Once it is paid off, we would continue to work, saving everything we no longer are paying towards rent towards retirement, we would hopefully both be on around 80k a year or more by that point.

    Once we had paid off the house and had saved and invested around 500k, we would sell the house, hopefully for a profit, and buy somewhere small to retire, or move into my parents' house if my siblings did not have any issues with it.

    We would then live off of the retirement savings until Super age, then coast to... uh... the end, taking a cheap holiday every two years or so, and just working on writing, drawing, knitting, watching movies, etc.

    QUESTIONS:

    1. Is there anything I am missing here or not taking into account?
    2. What areas should I be looking at to achieve this?
    3. Am I likely to find a mortgage for 500k that is flexible enough to allow faster down-payment?
    4. Which banks should I be looking into?
    5. Are there any tips and tricks you could share for something like this?
    6. Is anyone here doing the same thing or has any experience with this?

    Thank you, everyone!
     
    New Town likes this.
  2. Trainee

    Trainee Well-Known Member

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    The problem with a minimise leverage, minimise exposure, save your way to a low income retirement plan is that it only does what is on the label. You buy a 1.0L car? You hope you never go up a hill with 5 people in it.

    If you ever change your mind about kids, want to live in a bigger place closer to the city, your parents need to sell their house to pay for nursing homes, you ever lose your job for a while, it will have a big impact on your outcome.

    Maybe it will turn out the way you plan. But relying on not wanting kids, hoping you keep your jobs (that salary suggests you are probably vulnerable as you get older), etc isn't necessarily a lower risk than taking more educated risks with property and shares.
     
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  3. Fruitjuicante

    Fruitjuicante Active Member

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    When you talk about educated risks, etc, could you point me in the right direction if possible?
    I just don't want to end up in a game of gambling and market watching where saving for retirement becomes it's own second job, if you know what I mean? Because then the true gamble is not that the property investments do well, but that there is still enough of me left on the other side of it to enjoy what I've earned.

    But I'm willing to learn if there are any resources to check out.
     
    Cmelderis likes this.
  4. Tonibell

    Tonibell Well-Known Member

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    At your age planning to get a PPOR in an area that suits is a pretty good starting point.

    The rest of it will work itself out along the way - some goals and plans will change and some will change.

    Research that first property in detail and make sure it is a good investment - you will most likely outgrow in some way over the next few years.
     
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  5. skater

    skater Well-Known Member

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    This is pretty good advice. Don't get too bogged down on where you want to live in retirement. Heck, I'm late 50's and still can't decide. Oh, and the kids have moved out several years ago now, but we want a bigger house than when they lived at home. The only thing in life you can be sure of is 'things change'. Make your plans, but be open to change.
     
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  6. Fruitjuicante

    Fruitjuicante Active Member

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    I won't go into it too much, but my dad retired at 63 and then had two heart attacks and got an incurable auto immune disease. He's still alive and enjoying his retirement, but I don't want the same thing to happen to me, so I'm trying to get ahead of things and make some smart decisions now. I'm just trying to find more concrete advice on what to do now to secure an early retirement and do well for myself and my future.
     
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  7. Angel

    Angel Well-Known Member Premium Member

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    If you want the simple things in life, then buying a home to live in, pay it off and save for retirement is a perfectly reasonable life plan. I believe it is quite easy to "magically" pay off your home sooner - I have done it with both our homes. Without getting into all this "debt recycling" strategy that adds further risk to the plan. We moved up from the 2 bedder after 8 years and then paid off the "big" 3 bedder in 20 years even though the mortgage (and minimum repayments) was for 30 years. I'll present the details later.

    I would suggest that paying extra into your Super is the easiest and least stressful way to increase savings for retirement. Again there are basic strategies that require more details. Basic means you dont use convoluted financial "plans" and some advisor takes a massive fee out of your profit. Had we gone down the "extra Super" path rather than dealing with resi real estate, we would have at least $300k more than we have now, without ever having to deal with the realisation that our tenants live in nicer homes than ours is.
     
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  8. Fruitjuicante

    Fruitjuicante Active Member

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    Freaking awesome! I've been putting off upping my Super contribution, but especially when the market is down, this is the time to really do it. I'll get on that right away!

    Any other details you might have, I would love to hear them! Thank you!
     
  9. PropDir

    PropDir Well-Known Member Business Member

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    Hi Fruitjuicante,

    Please find some responses below.

    1. You mentioned you don't want to pay strata, however if you wanted something closer to Sydney metro, you could potentially consider a townhouse to expand your options. Otherwise you would likely need to look at something a bit further out from Sydney metro area. Do your research and negotiate as hard as you can. As some of other responses indicated, maybe keep your plans flexible... as some of them said things will probably change so be open to other opportunities as you go along...
    2. Western suburbs in Sydney as you mentioned in your post (e.g. St Clair, Penrith etc), also maybe somewhere like Glenmore Park however that is a bit further out West. South West Sydney in areas such as Bardia and Edmondson Park. Western suburbs and South Western suburbs is now getting alot of infrastructure put in including faster transport links for roads and trains, and many young couples are buying in these areas as there are good new schools and facilities.
    3. Not too sure about this - suggest you contact a good mortgage broker if you can. I am sure there are good ones on these forums.
    4. As per above, would recommend contacting a good mortgage broker.
    5. Keep learning more about the market, particularly the specific suburbs/areas you are interested in. Find out about the areas, what type of lifestyle you enjoy etc.

    Hope this helps a little.
     
  10. Gockie

    Gockie Unicycle - get exhausted but never two tired Premium Member

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    If you want to pay down your home as quickly as possible, you can take in a tenant or possibly Airbnb guests into a spare room.
    But as other posters have alluded to, life takes control and your plans might change over time. For instance, if we didn’t see an amazing home a couple of years ago, I’m sure we would have paid off the PPOR by now. But we saw an amazing house so we upgraded.

    You never know what’s around the corner :)
     
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  11. Sady.Sydney

    Sady.Sydney Well-Known Member

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    What people think of St Mary's South in terms of capital growth. 2nd Airport is still 5 years away so will it get significant growth in next 5 years?
     
  12. Fruitjuicante

    Fruitjuicante Active Member

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    It really does, thank you!!!!
     
  13. Jana

    Jana Well-Known Member

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    For 600k you can get property in Blacktown which require some Reno. May be you need 620k mark. Way better than St Mary’s..
     
    David_SYD likes this.
  14. Fruitjuicante

    Fruitjuicante Active Member

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    That bad huh? I've seen some places like 620ish that I'm hoping come down to around 560, I don't know, wishing isn't a very good plan.
     
  15. PropDir

    PropDir Well-Known Member Business Member

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    I think there will probably be growth, but don't know if it will be 'significant'.
     
  16. gach2

    gach2 Well-Known Member

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    I think both area are as good and bad as each other with its own pros and cons

    Blacktown
    Closer to CBD
    Train (Again depending where about)
    Shopping Centre
    But more expensive 10-20% (depending on product)

    South St Marys
    Easy M4 Access
    Area is gentrifying
    Need to drive/bus to train station
    St Marys town is improved but still meh (prob need to go Mt Druitt for anything more than Woolies/Coles/banks)

    While prices may not be much cheaper - quality of housing and land size is a plus
     
  17. skater

    skater Well-Known Member

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    I don't have any super & Hubby has a smallish amount. If our spare money had gone into Super instead of Real Estate, we'd be much worse off than we are now, and Hubby would have another 12 years to work until retirement. We've been living off our retirements for about 5 years now. Don't get me wrong, Super is great, but you can't use it at a youngish age.

    Glenmore Park is a suburb of Penrith and is not further out at all. It is a realatively modern suburb with homes built around 1990's, the roads are a rabbit warren and lots of traffic to drive to the station if you need to catch the train.

    St Mary's South is full of older, fibro homes. There's some nice places & some absolute shockers.

    Blacktown is more expensive, but similar quality homes. Personally I wouldn't touch Blacktown unless I was going outside of the centre of Blacktown. Shops are very crowded as well.

    No, it's not that bad at all. I've lived in the area for over 20 years. Honestly, you will hear lots of bad things from people that have never even been to the area. You need to take a drive and see for yourself. Lots of very nice areas.

    Blacktown has a major shopping centre.
    St Marys has a smaller shopping centre with Target, and all necessities, and a train.
    South St Mary's you are looking at a 1/2 hour walk to the train, but plenty of buses. The main Rd is Mamre Rd, which runs from the train station, at St Mary's, straight through Sth St Mary's, to the entrance to St Clair.
    St Clair is full of 80's/90's brick houses. Very close to the M4, catch a bus to the station, if you don't want to drive, or take a 1 hour stroll. Buses are plentiful. Has basic shopping centre for necessities, tucked away inside the suburb.
    Erskine Park is nearby and although people claim it is the best suburb, I think it's a poor cousin in terms of livability. Access to the entry of the M4 is city bound only, meaning if you want to go to Penrith you've got to drive Great Western, or go through St Clair.
    Major shopping centres in the areas are Mt Druitt, where they have approved a huge spend, or Penrith. For the cinema, I go to Mt Druitt where they have lounge seats, and they tend to be very quiet. Penrith gets very crowded.
     
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  18. Angel

    Angel Well-Known Member Premium Member

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    A couple of tips from an experienced "simple lifer"

    Buy your home for location above everything else. Consider aspect, path of the sun, fairly flat land rather then sloping, walkability. Why? Solar passive, vegies and gardens. Collapsing retaining walls and land slip is a PITA. Saves starting up the car when you can walk five minutes to the shops. Pay a bit extra now for premium location and the savings on weekly living expenses will easily pay for it.

    The house can be smaller than typical mcmansions. No kids? No stepping on lego in the living room means no need for several "spaces". You want something that can be improved with a coat of paint and new carpets, not a house already renovated with the price of labour and project management already added on. ....Unless you do want that, in which case just do it. You will be living there a long time, so it might as well be a pleasant experience for you both. You can easily extend a plain simple house later if you want to.

    Superannuation - see your company's website. Click on the tabs that say Planning for Retirement and Salary Sacrificing. You do not need your own personal SMSF if you are starting out, maybe later when you are more experienced, but dont let anyone talk you into the added hassle of one just now. The Super funds have responded to the flow of cash into Self Managed and have recently lifted their game, removing the main reason people had fled the old fashioned Super companies. You can learn more about Superannuation in that section on PC too.

    Happy learning
     
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  19. Angel

    Angel Well-Known Member Premium Member

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    Good point @skater about Super . I mean at this time in the economy's cycle, as we all know that we wont be repeating the massive capital growth seen in realestate for a while yet, if at all. Nothing much happened to capital growth for several decades during the 20th century.
     
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  20. Trainee

    Trainee Well-Known Member

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    Remember super isnt a good vehicle if you want to retire early, due to the preservation age.