NSW Sydney IP considerations

Discussion in 'Where to Buy' started by Ouga, 1st Jan, 2020.

Join Australia's most dynamic and respected property investment community
Tags:
  1. Ouga

    Ouga Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,100
    Location:
    "Trying is the first step towards failure" Homer
    Hi guys,


    I hope you all are doing well and wish you all a fantastic, healthy and successful happy new year 2020.


    I am after your thoughts.

    I am looking at acquiring a new IP in Sydney this coming months.

    My budget is $900K.

    I have been thinking of trying to secure a house while I still can and have been looking at areas in the North West, around the Kellyville Ridge area and surrounds. This gets you a 4/2/2 on a small block of about 300m2.

    The area is nice and all, but recently I have been wondering if perhaps this is too at the edge of Sydney for this kind of budget.

    Wondering if I may be better off with a 3 bedder apartment in a more central Iocation.


    Obviously the argument for the house is the lifestyle and land component that comes with it. There will always be people looking to raise their family in a house with a bit of a backyard, even if tiny. I also feel getting anything freehold will be increasingly difficult in the coming years and decades.

    The argument against is the fact it is still quite at the fringes of Sydney with lots of land not far away which would perhaps put a cap on the cap growth for a while.


    When it comes to the apartment it’s all about the location. Plus, proximity to transports, school while offering a pretty good living space, even for families. Of course the argument against is that, well, supply is potentially unlimited as new towers can always be built.


    I am targeting “nice” areas in a bid to minimise potential headaches with tenants and damages/repairs.


    Overall not sure which is the better value proposition for my budget.

    Keen to hear your thoughts, opinions and perhaps suggestions?


    Wishing you all the very best!
     
    The Falcon likes this.
  2. wombat777

    wombat777 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,565
    Location:
    On a Capital and Income Growth Safari
    With that sort of budget have you considered the area near Tallawong Station at Rouse Hill? Tallawong is the last stop on the new metro.

    Lot 18 Tallawong Road, Rouse Hill, NSW 2155
    Lot 48 2S Tallawong Road, Rouse Hill, NSW 2155

    Screen Shot 2020-01-01 at 1.43.23 pm.png

    New hospital will be built near there at some point too. Aim for within 10-15 minutes walk of the station. It's proximity to good public transport that should get good capital growth.

    Don't focus too much on land size but on location ( close to the railway station ). New estates are built with open space parks in mind.

    My own garden at the rear of my PPOR is 5.5m x 12m which I am perfectly happy with. There is plenty of open space around ( I am not far from the Rouse Hill Metro station ).

    When I was renting I found mowing a largish lawn a hassle.

    New shopping will be built in the area close to Tallwong Station.

    NSW Government reveal $386 million plans for homes, retail, parkland at Tallawong station

    ( the dark blue "local centre" as marked on this map - https://www.planning.nsw.gov.au/-/m...t-indicative-layout-plan-2017-05-17.pdf?la=en )

    NSW Government reveal $386 million plans for homes, retail, parkland at Tallawong station
     
    [d4rk-fr3d] likes this.
  3. Clive Palmer's Yacht

    Clive Palmer's Yacht Well-Known Member

    Joined:
    23rd Apr, 2019
    Posts:
    280
    Location:
    Sydney
    Hi.

    I would personally consider a lower end Inner West suburb, and stick to freehold - house+land- rather than a unit.

    Land closer to the CBD will continue to benefit from scarcity, and a good number of these suburbs have limitations on substantial unit development plus heritage type streetscape preservation limiting what can be done to housing stock.

    Some suburbs are on the new metro line, or have existing heavy rail access. These factors help ensure high interest from professional CBD workers (which should tick your box for less hassle). There should be much stronger and more consistent levels of renter interest here vs North West.

    Parking is not a huge "must have" for these tenant groups, but nice if you can pick up a property with rear lane acess so it could be added.

    $900k should get you something of a doer-upper, giving you optionality to manufacture added value via for instance an extension to take it from 2 bed, 1 bath to maybe 3 bed, 2 bath.
     
  4. Ouga

    Ouga Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,100
    Location:
    "Trying is the first step towards failure" Homer
    Hi guys,

    Thank you so much for your replies so far, greatly appreciate it!
    Tallawong is interesting from a future development point of vue, but man there is gonna be lots of land to be released. I need to do some homework on it though, given the size of the future development I see the appeal you speak of @wombat777 .

    @Clive Palmer's Yacht - while freeholding in the inner west sounds great, I think I've missed this boat unfortunately - did you have some specific suburbs in mind? Looks like I need to go as west as Bankstown to start seeing some options.

    Any other input is very welcomed!
     
  5. Clive Palmer's Yacht

    Clive Palmer's Yacht Well-Known Member

    Joined:
    23rd Apr, 2019
    Posts:
    280
    Location:
    Sydney
    Really? I maintain something of a watching brief and have seen small 2 bed/1 bath doer uppers at this price level in Dulwich Hill, St Peters, Sydenham, Tempe, Ashfield..not Balmain admittedly, but solid enough locations!

    If interested, you need to zone in on a couple of target 'burbs and stay close to the local agents servicing them. I reckon you will find something inside 3 months.
     
  6. Cool-hand

    Cool-hand Member

    Joined:
    31st Mar, 2019
    Posts:
    9
    Location:
    Sydney
    Are we still talking about house and land here. When I search those suburbs recently sold, under a mill, I'm going back to May this year to find anything meeting your criteria.
     
  7. Clive Palmer's Yacht

    Clive Palmer's Yacht Well-Known Member

    Joined:
    23rd Apr, 2019
    Posts:
    280
    Location:
    Sydney
    80 Coronation Parade, Enfield. 11 Oxford St, Burwood. 98 Wentworth Rd Burwood. 24 Porter Ave Marrickville. 53 Crystal St Petersham. 561 New Canterbury Rd Dulwich Hill. 11 Station St Tempe. 15 Petersham St Petersham.

    All June to Nov sales up to $900k.
     
    [d4rk-fr3d] likes this.
  8. Cool-hand

    Cool-hand Member

    Joined:
    31st Mar, 2019
    Posts:
    9
    Location:
    Sydney
    Ok fair enough but you did say 2 bed/1 bath and mentioned some specific suburbs. None of those properties you mentioned meet that criteria.

    The only exception is 24 Porter Ave Marrickville. How much did that sell for? I'd be shocked if that sold for under 900k in November 2019.
     
  9. Clive Palmer's Yacht

    Clive Palmer's Yacht Well-Known Member

    Joined:
    23rd Apr, 2019
    Posts:
    280
    Location:
    Sydney
    Let's not split too many hairs - Inner West was my point!! That could be Balmain East to Burwood.

    I looked on Real Estate and Domain sold prices up to $900k in all IW suburbs. I guess it could be incorrect, but have no way of telling.

    Could you stretch a nudge over that figure though? Long term, it's neither here nor there, but could open up more possibility. I personally would do it to bag house and land as opposed to an inner city unit.
     
  10. Ouga

    Ouga Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,100
    Location:
    "Trying is the first step towards failure" Homer
    Thanks a lot for the feedback guys, appreciate all the ideas :)
    This price segment of the market is pretty tough in Sydney right now.
    Cheers
     
  11. Car tart

    Car tart Well-Known Member

    Joined:
    16th Sep, 2018
    Posts:
    916
    Location:
    Sydney-Melbourne
    I’d buy two 2 bed home units in Richmond.
    zero vacancy factor due to raaf.
    Better return on investment.
    Absolute no new units being built in Richmond so prices are ready to jump.
    RAAF tenants move out on Friday, next one moves in on Saturday.
    Zero headaches.
    Future price growth with new bridges, better roads etc
    You get two compared to 1, so good spread of risk.
    Lower land tax.
    RAAF staff are desperate for clean quality accommodation.
    Many executives have permanent home somewhere else and simply stay there 4 days a week.
    All the females in my family are high flying executives (with useless or no partners) who don’t have time to mess around with the effort maintaining an investment house takes, especially in these dry times during vacancies. So they buy home units for the low land tax, high claimability of construction and everything is done by the OC.
    Miss car tart (31) owns one
    Mrs car tart owns 4, 2 tenants have been there longer than she has owned, 1 has vacated once in 6 years. The other settled at Xmas.
    Car tarts sister owns 2 in North Richmond for 24 years has never had a vacancy longer than a week. She had to force the agent to keep the property vacant to recarpet and repaint as it’s so easy to find tenants.

    Bad points.
    Home units are preferred to large houses, so you shouldn’t buy a large home in Richmond. Large houses attract x number of singles.
    Home units are no good if you’re a fixer upper as all the external and building repairs, maintenance, insurance, gutters, landscaping, etc are covered in your levies.
    Very little “show off” status compared to owning a McMansion in the “Hills”
     
    Realist35, [d4rk-fr3d] and Ouga like this.
  12. Jaxon Avery

    Jaxon Avery Well-Known Member

    Joined:
    4th Sep, 2017
    Posts:
    103
    Location:
    Gold Coast
    Mate you could buy 4 properties with positive cashflow from day one, so potentially be making 15k a year after all expenses and then still have tax deductions on top of this. (also diversifying risk by owning is multiple states.

    I personally would rather this as done right you get growth, positive cashflow and could structure to add value as well.
     
    Ouga likes this.
  13. Ouga

    Ouga Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,100
    Location:
    "Trying is the first step towards failure" Homer
    Hi @Car tart , thank you for your post!
    Funnily enough, I was considering Richmond at some point, but then thought it to be just too far away. I see your point about the RAAF base there and the need to an accomodation for the staff.
    When you say home units, is that just regular 2 bedder strata units? I have not come across this particular term before, so unsure if that is any different than a regular unit/apartment?
    Only reservation is perhaps the CG potential could be less than suburbs closer to Sydney.

    @Jaxon Avery - thanks for your reply. While this is a strategy I have read some are pursuing, I think splitting the budget in 4 or even 3 will mean either regional or worst part of town. That comes with tenant headaches and a couple repairs or arrears quickly eat into the yield. Investing interstate really sounds fun, but I am the first to admit I don't think I have the knowledge to really get this done confidently. Plus, I would be concerned with CG for regional purchases.
    Out of curiosity, is there a particular type of property you target with this approach?

    Thanks guys
     
  14. Car tart

    Car tart Well-Known Member

    Joined:
    16th Sep, 2018
    Posts:
    916
    Location:
    Sydney-Melbourne
    Strata unit = home unit = apartment. They are the same thing
    Flats are not strata titled so a block of flats = one owner
    Block of units has a Body corporate and multiple title ownership

    Capital growth is difficult to predict, so when I bought a dozen flats in St Marys NSW for $30-35k each, even my staff laughed that I was buying property cheaper than their cars. I sold them 3 years later as strata titled units for $70k each, so it is a game of educated guessing.

    I work on numbers, so with none being built in Richmond ATM, it means pressure builds in rental and price. When new ones are built, the prices of the new are always miles over the prices of the old. So it has away of pushing up the price of established units.
     
  15. Jaxon Avery

    Jaxon Avery Well-Known Member

    Joined:
    4th Sep, 2017
    Posts:
    103
    Location:
    Gold Coast
    Mate the money is in buying a problem selling a solution.

    and I have heard horror stories of high end properties and low end. neither of which I care either way because the numbers are more important.

    Captial Gains tax? why the concern?

    ok so I disagree in the sense you can get central properties in decent areas for 300k. so that's 3 properties in pretty central areas throughout the country. (no not central sydney or melbz)

    but the yeild will be 2% higher PA e.g. instead of 5-6& it would be 7-9% Return.
    and I target things I know hold good value with the previously mentioned strategy.
     
  16. [d4rk-fr3d]

    [d4rk-fr3d] Well-Known Member

    Joined:
    9th Jul, 2019
    Posts:
    168
    Location:
    NSW
    Which location do you reckon is a good start with smaller or cheaper property with Cashflow Positive?
     
  17. Jaxon Avery

    Jaxon Avery Well-Known Member

    Joined:
    4th Sep, 2017
    Posts:
    103
    Location:
    Gold Coast
    Hey Mate,

    So I like a few areas around Australia, here are some of the ones that sparked my interest.

    Although you should really study the area in depth before going ahead :) but hope this helps.
    https://www.realestate.com.au/sold/property-house-tas-george+town-131355342
    https://www.realestate.com.au/sold/property-house-tas-clarendon+vale-130945478
    https://www.realestate.com.au/sold/property-house-vic-churchill-131757594
    https://www.realestate.com.au/sold/property-house-sa-elizabeth+east-131035882
    29 Diosma Street, Rangeway, WA 6530
     
  18. AAA2214

    AAA2214 Well-Known Member

    Joined:
    16th Jan, 2016
    Posts:
    336
    Location:
    Sydney
    Did you check out Quakers hill? Popular among both owner occupied and investors. If you can get one with a granny flat or potential you can get rent around 900-950 per week ( 500-550 for the main house and 400-420 for the granny)