NSW Whats wrong with Mt Druitt Now?

I am looking at some new developments in Mt Druitt (the actual Mt Druitt) near the station. Its a 2 bed 2 bath unit around 400K brand new. I am wondering what exactly is wrong with this investment or it is just my investment strategy which cannot find anything wrong with it. If I pay 100K down for this the loan for 300K is approx. $1050 p/m. The rent is approx. 1600 p/m which pretty much covers the stuff on top of it like strata etc. Plus I get a lot of depreciation as well because the property is new. I am trying to figure out why would someone not buy it? I certainly not think it will dive down to 350K in the next couple of years so whats the risk?

 

Ah hash, brown is not everyone's favourite colour and Mount Druitt is not everyone's favourite suburb.

There is a social stigma attached to the place. It could be the drugs, the robberies or both. That's why it's cheap.

You think the place is a winner and so do I. I have invested in the area and went against the grain....and I'm in front.

 

If it does go down to 350k then assume that the rest of the market does something similar as well.

Apart from the financials, you may want to check out the builder and ensure that the build quality will be decent.

 

You'll be able to buy a house for that shortly in the Druie.....

 

Appreciate your input @sash. Thank you for that. I like it that is what I wanted to hear. Would you care to elaborate why do you think so? I can't think of a reason why an investor with a spare 100K would not like to depreciate that much. I know depreciation is just one factor but where else can do dance with 100k?

 

I've been watching Mount Druitt closely for a while and I'm guessing as to why it's not as hot anymore as supposed to 12 months ago is because if the Sydney house prices start to fall as it is already starting to cool down in the west, Mount Druitt will probably be one of the hardest hit surburbs in the entire Sydney region. As it is a sort of a less than desirable place to reside in.

Don't take anything I said as factual information, it's only my guess and I'm pretty new to this so there's also that. Good luck

 

If you've got a spare $100K to drop into a place where the value is going down as we speak, just because it will attract "depreciation", why not save yourself some time and buy mining shares? They will lose value without the associated headaches of dealing with residents.

 

If you are an investor, then take your $100K to somewhere that has a very high probability of increasing in value over the next few years. Like the glorious Druitt with Palm Trees?. Datto will explain.

 

Depreciation is for noobs.

Drui is dropping now and you will be paying a premium for a new product that will look tired like everything after 5 years. 1600. Month will not "almost" cover everything either. Exclude your deposit and your really paying 1600 a month just in interest. Remember there is an opportunity cost associated with tying up your capital. Unless it is positively geared from day one or you can see yourself making a decent capital gain in 5 years it's a pass for me.

 

Certain about that? It may just get to 360k but aren't we here to make money??
Why not look elsewhere that your certain it WILL increase in value

 

I took the pleasure in making a graph. And kept with my high quality phone graph producing abilities. But a picture paints a thousand words... Enjoy

 

Ready my thread on the Druie dropping in slow motion.....

Ask the question why an investor in their right mind would buy in the Druie at a price of 400k for a unit. The maximum depreciation on something like this would be 15k...but upon on purchase you would lose at least 100k in equity.

I see the price of units come back down to the low to mid 2s.

Houses I can see in the low to mid 3s again....

 

Saw an advert pre-xmas for a 3/1/1 house in Bidwill for $380k. There are some cheapies around.

 

Will be even cheaper in about 6 months....

If people are going to buy...in Sydney now...you need to do your homework well and buy extremely well.

As I have said before...houses going for 380k in the Druie are likely to be under 350k within a year...

 

@sash - the Druie isn't my demographic or price range for resi (luckily).

 

What? The Central Coast? Penty of cheapies up there.

 

Watcha saying......people here have made a motza....on the old Druie!

On a serious note...neither is it mine.....it will certainly be interesting to watch over the next few months.

I reckon the rents are also going to settle a bit....

 

400k for a 2 bedroom unit in Mt Druitt
Do some more research and you could pick up houses in the area for a similar price, which also come with some land for development down the track.

 

Or arrears, terminations & determinations.

 

How long shall we have to wait @sash ?

Is 2017 too long or about right.