NSW Property buying advice on a budget of 650K

I have just secured a pre-approval on a loan for 650K (first home buyer) and hope to buy a property in Sydney suburbs in this budget. I want to buy the property with not the prime goal of being the long term PPOR (but would still live there) and the goal is to be able to sell the property in next 4-5 years with a decent profit, and perhaps then move on to a bigger property. Some things that i want in the property:

- I work in the city and i am open to travelling by the car about 90 mins one way. Hence i feel the suburbs i am targeting could be within 50 km radius
- I do not want to go for apartments as everyone seems to agree that apartments wont appreciate in value in this timeframe if at all. So i am compromising on travel time.

Coming to the main purpose of the advice i am seeking is that which suburbs are a best fit with this goal and price point. I have spent sometime researching and this weekend took a look at some open home in the suburbs of Colyton and Blackett. To be frank, Colyton seemed much better than Blackett in terms of everything and i have ruled out the suburbs around Blackett, i do not think that we can live there. But given the price point i have to buy a house, i understand i am very limited in terms of suburbs (or likes). In my research and very limited knowledge of Sydney with my budget i found the below options. I also refer to Get the facts the property ad left out for some basic research on suburb quality and do consider decent or medium level affluence:


Bligh Park
Glenmore Park (mostly Townhouses in this price)
Cranebrook (Townhouses only in this price)
Eagle Vale
Ingleburn (and around like Eagle Vale, Gaby)
Macquarie Fields (very limited now in this price point)
Windsor/Richmond

I am hoping that you can suggest me some options and if my approach or thought process even makes sense. Are there any suburbs left that still fit this price range but would appreciate in 4-5 years by 15-20%?

 

Hi there,

I haven't looked into these suburbs in-depth but was going to propose an alternative. Have you considered the concept of "Rentvesting" where you purchase an investment elsewhere (not in Sydney) and rent closer to your work? With 650k you are quite limited in the Sydney market for houses or townhouses. You would likely be looking closer to the outskirts of the city (your compiled list of suburbs). From my own research, there is no correlation between distance from the CBD to price growth, however, I wonder if your money could be better spent elsewhere if you didn't limit yourself to Sydney.

I have previously written an article on this concept which I could summarise as the following: Rentvesting allows an individual to rent where they want to live but purchase property elsewhere within their budget. This assists an individual to get into the housing market where they may have otherwise been unable to.

Benefits To Rent-Vesting

• The individual can choose to live where they want and are not tied down by their owner-occupier mortgage.
• It allows individuals who can’t afford to purchase inexpensive areas but still live within that area.
• The interest on investment loans is tax-deductible whilst a principal place of residence (PPOR) loan is not.
• Can increase savings if the rent is cheaper than the mortgage repayments in an area.
• Rental income can be used to cover the expenses of investment properties.
• Can purchase in an area with greater upside to capital growth.

The age-old saying that rent money is dead money is not necessarily true today. Renting provides an individual with a key necessity that is housing in a location that isn’t limited by property prices. If an individual was to rent and not re-invest their additional savings, then it would seem relatively fruitless. However, rent-vesting flips the perception of renting on its head and can be seen to have numerous advantages if employed successfully.

This is just an idea you may want to consider, I hope this helps.

 

Agree with all of the above. I just began rentvesting from Sydney with a similar size loan, bought in Brisbane and immediately rented the property out for 4.4% gross yield.

 

Hi,

I also wanted to know some of the basics , if you can help. My budget is around 600k and I wanted to buy in Rooty hill NSW. It would be my first home and I am gonna live there for next 3-4 years then I will go overseas for next 5-6 years and will put it on rent. My question is that, can I pay the monthly loan installments and other expenses like counsel and strata etc with the rental money or I have to add more money on my own to pay these??

thanks

 

Hi there, the amount of expenses your rent will cover depends on the amount of rent and expenses associated with the property. You would need to run a cash flow analysis in order to determine if you need additional funds to hold the property when you move overseas. Feel free to DM me if you want to better understand how to run a cash flow analysis. I hope this helps.

 

ok thanks, where can I message you please ?

 

I have sent you a direct message.