Sydney-Inner city terrace houses?

Discussion in 'What to buy' started by maverick, 15th Apr, 2019.

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  1. maverick

    maverick Well-Known Member

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    Just wondering what you guys think about two level terrace houses in the Sydney inner suburbs for rental income? Currently considering suburbs that are within walking distance to the CBD like Pyrmont, Woolloomooloo, Darlinghurst, Surry Hills, etc. Budget would be up to 1.5m. Would appreciate it if anyone with any relevant experience/insights could chime in. Cheers.
     
  2. Lacrim

    Lacrim Well-Known Member

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    What I do know is that they are preferred by tenants (perception of space) and that they always fetch a premium and perform accordingly CG wise over their single storey brethren.

    Include Redfern, Paddo, Enmore, Alexandria, Camperdown, Newtown, Ersko, Potts Point, Mcmahons Point etc. I think widening your search a little is a good idea.
     
    Last edited: 15th Apr, 2019
  3. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

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    Inner city Sydney terraces are generally quite popular from a rental perspective, some areas more than others (there are a few housing commission pockets/poor public transport pockets).

    I'm a big fan of terrace properties as they are generally in great locations, popular with owner occupiers (better CG over time), fun to renovate and relatively easy to rent out.
     
  4. maverick

    maverick Well-Known Member

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    As a property manager yourself, are these properties maintenance intensive? The main reason I'm asking is because they all seem to be very old period/character type properties. And would you recommend a particular suburb(s)? Thanks a lot.
     
  5. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

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    Most of these terraces had work done on them in the 50s/60s to bring the outdoor toilets in and depends on how much more work was done and the quality. Common maintenance issues are leaking metal roofs and wiring, but nothing that would substantially turn me off buying these. I have renovated 4 of these terraces in recent years.

    Try to get one without too many rising damp issues as they are hard to fix properly.

    For investment I like some parts of Redfern (be wary there's huge variations in Redfern), Darlinghurst, Surry Hills, Alexandria, Paddington (could be too pricey), Chippendale, Darlington.

    Feel free to PM me if you'd like my thoughts on any specific properties :)
     
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  6. Scott No Mates

    Scott No Mates Well-Known Member

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    Like anything old, terror souses do require maintenance. Whether it is rising damp, poor underfloor ventilation, retiling/slate roof replacement, leaky chimneys, replacement of sash cords on windows, old wiring and the like - this is over and above your usual maintenance issues - painting, kitchens, bathrooms, floor polishing, etc.
     
  7. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    This is certainly a very good investment category, and a very reliable investment.

    Just so you know what you get for that price range: in Paddington with $1.5m you would be looking for a two bedroom terrace without a parking spot.

    You can get a bit more bang for buck in Surry Hills, and surrounding suburbs.

    While these suburbs are down along with the rest of Sydney, it is worth noting that these suburbs have been pretty resilient in the current cycle.
     
  8. maverick

    maverick Well-Known Member

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    Hi John, do you think a parking spot is an important feature of these inner-city properties? To the layman it would seem that "within walking distance to the CBD" is the main selling point of these areas. Or is there a bit more to it?
     
  9. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    I think a parking spot is essential for a long term buy and hold strategy.

    Parking spots add asymmetric value to the property. Parking spots are sold as stand alone investments in the inner ring suburbs.

    I understand that you will still get tenants without a parking spot, but without a parking spot you will get a different type of tenant - a more transient type. It would to me be more like a hostel.
     
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  10. Depreciator

    Depreciator Well-Known Member

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    Nobody really buys a terrace house for income - it's easy to spend $1.5m and get less than $1,000 per week in rent. People buy them for growth. I have renovated a couple and I know the cost of dealing with rising damp, dodgy electrics, a failing roof etc. It's not a bad idea to look for a terrace where all that expensive and largely invisible stuff has been done.
     
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  11. maverick

    maverick Well-Known Member

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    It's interesting that you say people buy these properties for CG because from what I've seen so far by checking sales histories, it looks like prices have only doubled since the early 2000s. Have I got the numbers wrong?
     
  12. Depreciator

    Depreciator Well-Known Member

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    Some would have done more than double, and some less. Many doubled in 5 years recently. All will have fallen back a bit over the last year. Inner ring houses in Sydney close to train line especially will always be a safe medium term bet. I would look at Newtown and the northern part of Erko. They are great spots.
     
  13. Chabs

    Chabs Well-Known Member

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    Is this part of Redfern okay? 202 Abercrombie Street, Redfern NSW 2016 - Terrace Property For Sale | Domain

    It seems a bit cheap for a 4 bed, even without the parking space
     
  14. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

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    I can see several issues that might explain its price:
    - its on a street which is one of the main thoroughfares in the area
    - its proximity to 'the block' is not a good thing
    - the total lack of outdoor space
    - the odd shaped walls and rooms

    All these factors will contribute to its undesirabilitly for owner occupiers and keep a ceiling on the price. It is a handy location for Sydney uni students however, but I definitely wouldn't buy it.
     
  15. Scott No Mates

    Scott No Mates Well-Known Member

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    @Chabs - have you looked at this one?

    Linky

    Looks like it may have RLA as well.
     
  16. Gockie

    Gockie Life is good ☺️ Premium Member

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  17. Gockie

    Gockie Life is good ☺️ Premium Member

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    This part of Abercrombie St is really quiet. It’s the part north of Cleveland St that is busy. You can’t even drive from this section of Abercrombie St to the other side so there is no through traffic. And you won’t have any issues from “The Block” on this one.
     
    Last edited: 22nd Apr, 2019
  18. Gockie

    Gockie Life is good ☺️ Premium Member

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    I’ve circled the parts I wouldn’t buy in (doesn’t feel nice as a neighbourhood)
    1B55FFD3-EAEF-457C-8554-A7B2DC10682A.jpeg
     
  19. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

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    I much prefer this one, its a nicer East Refern pocket with tree lined streets. The RLA is a pedestrian access way, one of the original 'dunny lanes' but still useful for bin/bike storage and access. There is some proximity to the housing commission towers on the other side of Young St, but far enough. I renovated 76 Telopea St a few years back.
     
  20. Chabs

    Chabs Well-Known Member

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    Major improvement over the Abercrombie one, kitchen area is actually useable for example. I guess the major perk of the former is proximity to campus/redfern station.