NSW Units in Bexley vs Ramsgate

I am currently looking for a PPOR with a budget of 600-700k, especially units in a small old walk-up blocks. I have narrowed down to these suburbs: Bexley/Bexley North and Ramsgate/Ramsgate Beach and have done some analysis on pros and cons.

Bexley/Bexley North

Pros:

• Pretty good location - reasonable travel distance to CBD, close to airport, M5, train stations (Kogarah and Rockdale) and shops, driving distance to beaches.
• demographics is good for professionals, singles and young couples.
• Some streets are quite and wide mixed with houses and small blocks of units (most are OOs). So have something to choose from.
• Crime rate is relatively low.

Cons

• aircraft noise (at Monomeeth St in particular and I've seen a lot of recent sales at this street.)
• fewer stocks in the current market.
• The value of units is relatively stable in the past 5 years thus the capital growth is not ideal (I am also looking to turn it to IP after living in for a couple of years.)

Ramsgate/Ramsgate Beach

Pros

• Nice lifestyle - close to beach, shops and cafes.
• good demographics.
• stable performance in contrast to other Sydney eastern suburbs in the last 5-10 years.

Cons

• not very convenient in terms of public transport.
• can be very busy at some streets.

What are your opinions on these suburbs or what other suburbs do you think are good places to purchase a PPOR with the above mentioned budget.

Your comments/sharing would be greatly appreciated.


Cheers,
AUNZ

 

I would keep both areas on the table and focus on:

1. How much below market you can pick up a unit for in either area
2. What is the outcome of recent strata meeting and in turn potential future costs
3. What developments have been approved next door near by that my affect good/bad your building
4. Look at potential solutions for cons in each area - for example are you able to install double glazing windows to reduce aircraft noise?

 

Living in the district for my entire life, as PPOR I would be choosing Ramsgate/Sans Souci areas.

The busing along Rocky Point Road is regular to Kogarah/Rockdale. Plenty of bus options. The travel to city in peak via car is around 50minutes, and 25min out of peak. Takes me about 45min to get into the Shire from the city most days.

There have been a few developments along the main road recently so I believe the variety of choice will be there and you should be able to get some value for money. Just my 2 cents.

 

I live in Bexley and grew up there. The airplane issue is almost non existent right now, I believe they changed paths a few years ago.

With your budget, you may be able to get a nice red brick Villa which I live in. They are good quality and sturdy. The strata is ok too.

Ramsgate has easier weekend lifestyle such as cafe's and beach, but travel is harder.

 

Thank you @Shahin_Afarin for your invaluable comments. I was wondering:

• What would be the positive/negative impacts to the building if developments (both commercial and residential) are approved or new developments are coming up nearby?

• What else needs to pay more attention in the strata report?

 

Thanks @Rugz06 for your sharing. That must be an enjoyable area to live.

Yes, I find the traffic a bit annoying at times (being too spoiled due to living very close to city - only 5 mins driving to work).

Re the new developments, what impacts have they had on your property?

 

Thank you @Tofubiscuit. It is good to hear from a local that the aircraft noise is not an issue there. I've checked on the flight runway and also been told that it is pretty bad at Monomeeth St occasionally.

I am interested to know what made you choose a villa over a unit? As a villa is a single-storey, will the buyer own the land that the property is standing on? What is an average strata fee with basic amenities?

 

I own in/around both areas, and Ramsgate/Sans Souci is harder to find tenants due to the transport. But from a PPOR perspective, Ramsgate is definitely the better pick. But it depends on other factors, such as where you work etc.

I would add that when shopping for a PPOR, you don't need to find the deal of the century. Find a place you would be happy waking up every day.

 

Thanks @John_BridgeToBricks. I definitely agree with you. It is not only a place but a feeling attached to the place. But I will not make an emotional purchase

However I do have a plan to turn it to an IP after living for a couple of years. That's good to know from the renting perspective. What does it look like in terms of capital growth?

 

I did attend an auction on Beaconsfield St, Bexley for a villa, a cple of wks ago. Sold for $651k.

Far better comparable places sold for around about that much or less...

 

Thank you @twww for the info. What are the far better comparable places if you don't mind me asking?

 

I live quite close to this property and inspected it. It is a good buy at that $651K. The street is rated as one of the best streets if not the best street in the suburb.

There are some other cheaper villas around the area but there would be a bit of work to get it to a nice condition.

- Nice community park
- Large mix of owners who never move out
- Quite street
- High up land

One downside is that its 10-15 min walk to Kogarah or Rockdale station.

 

I own both a Villa and a Unit, everyone has different strategy and different views. Do what works best for you.

For me, my property investment strategy is focused on older villas/units mainly because I own my PPOR out right and have no desire to use PPOR as my main asset vehicle (i.e. keep upgrading and take advantage of the CGT exemption benefit). I want a balance between CGT and cashflow as I plan on holding these long term.

The older buildings are built to last, have lower land tax value (yes you do own a portion of the land) and better rental yields then houses.

Villa are good because:
1) You will have 20% - 25% of land ownership of the total strata
2) Usually attract better tenants
3) Value holds up better than Units as units are really a concrete block in the sky, you can always build more by going up

Old units are good because:
1) Better rental yields, easier to rent as the asking price is usually cheap
2) Affordable to get in, some may be able to buy 2 units instead of one house as investment and still generate more gross rent
3) Rent price usually holds up even in a recession as you are pretty much as cheap as they come in the property ladder

Strata for villas range from $620 - $800 for a 2 bedroom, and units range from $550-$700 2 bedroom (these are old red brick builds and not your Opal or Mascot apartments!)

 

Bexley North/Bardwell Park and Bardwell Valley, no plane noise and traffic is better in my opinion

Personally I think Ramsgate is a pain to travel from, much rather be closer to a train station

 

Thank you @Tofubiscuit for the additional info. I've noticed that most of the villas were built in the 70s and are still well maintained. What are the downsides if the property is turned into an IP down the track from depreciation perspective (or it is not worth considering depreciation)?

 

Thanks @Tofubiscuit for your generous sharing. Your comments are very helpful and have given me more insight when looking at strategies in property investing.

 

Investors use depreciation because its a non-cash tax deduction.

However, I never invest based on this because the depreciation ultimately ends up in the purchase price upfront for an investor and also, the new buildings are so poorly built, you may end up paying much more in repairs (Opal / Mascot aside, I have heard many stories of $20K - $50K for water damage, walls etc )

Downside in the future for you is that the capital gain may not be as good as a house with land in a growth suburb. I stress the "may" as no one knows.

 

Thank you @fobo. I feel the same about travelling in traffic and prefer to be close to public transport.

I am not quite familiar about Bardwell Park and Bardwell Valley. What's happening there at the moment?

 

Absolutely agree! When shopping for units, I only look at the old small blocks rather than the newly built, shinny apartments with lots of add-ons you have to pay for.

No one has a crystal ball but I believe that a house with a decent land size has more potential than a villa/unit in well performed suburbs.

 

Its just a really nice area, no huge developments, lots of parks, shops nearby. Close to M5 and airport line train