NSW Sydney, Suburbs for IP ($1.5M)

My wife and I are currently considering our investment options and I'd like to get some advice.

We have a joint income of circa $380K with no dependants. We have an existing investment property in the Inner West (2bdr apartment) that we purchased in 2016 that's worth circa $800K. We are renting an apartment in the East paying the same rent we are collecting from our investment.

We are from opposite ends of Sydney so are still yet to land on where we want to set ourselves up long term once we have kids. We considered cashing out of our investment property and picking up a property in an established area for circa $2M that we would look to rent out until we are ready to move into a house, likely in the next 5-10 years. I have turned away from this for two reasons:

1. I am trying to make a call today on where I think I will want to live in 5 years time and there are so many variables that are unknown (location of our families, incomes at the time, impact future kids will have on our requirements, etc); and
   
   
2. I would prefer holding my investment property for as long as I can, particularly as I don't like selling property.

My revised strategy now is to pick up another investment property for a maximum of $1.5M that I'll look to rent out. When I reach a point in my life where I know where I want to live, I will then consider my options at that point and what I need to do to get there (sell 1, 2 or none of my investments).

At this stage we are leaning towards getting a house with land, particularly as we already own an apartment. Does anyone have any suggestions for locations in Sydney that we should be extending our search to?

 

I tend to think units won’t go up anywhere near as much as freestanding houses will. So I’d possibly sell the unit and buy a house sooner. You are right though, you don’t have to buy the PPOR just yet, but think about where you do want to buy. It might take several months before you find the right property too… for my partner and I it took ages to buy our first house. We bought a good house (not flashy in any way) in a nice neighbourhood. Between 2008 and 2016 it doubled. It has possibly doubled again, or, maybe put on 800k to 1mill. But that’s ok cause we traded up, bought our amazing home, better location (though in the wrong council area for Covid, thanks to changes in the Council borders arrrrgggghhhh!) It would probably comfortably sell 1mill more or so than what we bought for but we would never know for sure unless we sold. Sydney units really haven’t moved since 2016 in many suburbs, there is more supply than buyers in a lot of locations, keeping a lid on price rises. Maybe your unit is better than average in this regard, I don’t know, but I truly think land is what is in high demand for Sydney and landed property is the way to go.

 

For an IP, in my opinion the best bang for buck within that price point for a detached house would be: Bankstown and surrounds; Seven Hills, and you could squeeze into some parts of the St George area.