Nathan Birch - Western Sydney deal $180,000 for a HOUSE IN SYDNEY IN 2011! 9% Yield.

So I will disclose a recent deal I have done in western sydney. People have had a disbelief that my numbers of the properties and volumes accusing that they dont work and just to show full transperancy, I will provide details of 6 recent properties I have purchased this last 2-3 months.

The property is in Willmot, purchase price $180,000 renovation $6000 rent $300+pw and reval around $240k.

Now others can say there was a recent sale or couple in the surrounding streets thats because I helped a few mates get into these ones at these levels also.

It needs a paint, carpet and fence and a few little nick nacks.

There is new developments in the surrounding suburb or Ropes Crossing selling for around half a million on 400sqm.

I have attached a link to pics for entertainment.

http://binvested.com.au/?p=965

Good deal Nathan. I'm curious when the ad reads:

"Owner occupier only (as per contract of sale)", how you managed to buy as an investor? Is this a housing commission area where the Govt only wants owner-occupiers moving into the area to lift the reputation and/or values (the Govt stipulated the same clause on ex-Govt renovated houses in Manoora, Cairns)

Did you actually get a professional valuation?

Oh yep, sorry forgot to mention... I had this clause removed.

Before anyone asks how or trys to backlash what we are talking of here... I had it removed from dept as the property was getting vandalised. It is just a matter of asking the question

NedKelly said:

Did you actually get a professional valuation?

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I have my own valuation software for desktop.

Price of value is based on recent properties sold in current marketplace obviously after it is given a haircut and a shave.

Is this the place they found the dead guy in a wheelie bin? Lol

What is the strategy for preventing further damage before you get tenants in?

Yep, I was doing the gardening there and found him.

Jks.

The property is now boarded up so vandals cannot get through it.

I dont know much abt Willmot ..but dame it sounds dangerous 0.o
i dont know what sort of tenants your expecting lol


Regards
Michael

Mick C said:

I dont know much abt Willmot ..but dame it sounds dangerous 0.o
i dont know what sort of tenants your expecting lol


Regards
Michael

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Nah nah, its just a rough area, its cleaning up.

There was a murder out there the other day well in that district. People get killed all over the place just they dont hit the TV. I wouldnt live there personally, but I know plenty people buying across the road in new estate coz it looks pretty.

Parents had a property in Willmot a little while back, during the renovation my Dad practically lived at the property to avoid vandals!

For anyone that doesn't believe Nathan this time, I can vouch for those numbers - previously lived in Lethbridge Park (next suburb over, in fact just across the park!) and am currently looking to buy in the area because I know the market. My broker couldn't believe it, but there's a few good ones out there!

I believe the numbers...but just not my sort of buy- once you go out that far out west you better expect high yeild!!! because capital growth arnt gonna be your friend haha

I prefer the safe buy in established good areas- decent yield, solid growth and reliable tenants.

Regards
Michael

Mick C said:

because capital growth arnt gonna be your friend haha

I prefer the safe buy in established good areas- decent yield, solid growth and reliable tenants.

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I beg to differ, yes the CG usually wouldn't come as fast as inner suburbs, but it's there - increased quite a bit in the last 12 months or so due to FHB and investors.

Outer west is still established, and you still have your good pockets. True, most aren't great, but if you get to know your market you'll know which streets to stay away from. Decent yield and growth are definately there too, and no matter the area you're going to get good and bad tenants.

Honestly, the outer west suburbs of Sydney aren't *that* bad, it's just been stereotyped from many years of DOH tenants and druggies.

Or maybe I'm just biased from living there for so many years

Having local knowledge is key !! before i buy a place i would spend 2-4 days in the area normally in the local pub/motel and i explore the place and ask the local plenty of questions, normally over a beer or coffee- my shout ahha ...as you mentioned there are always good and bad streets


True, western Sydney have improved a lot in the last 10 years...just look at cabramatta- but end of the day, peoples "stereotypical views" and perception still drives the market to some degree.

Unless there is a massive drive for change by the local authorities/council it be a while before any massive CG kicks in

Edit: My family has a few IP in the cabramatta region....so to be honest it's not a bad area...but any further out is out of my comfort zone.


Regards
Michael

in 1998 willmot was $60k or less, thats 4 x in value over just over 10 years

CG does come into play I think more than other areas actually....

Your right Mick, the local knowledge is great, dont let them persuade them because they lived there all their life but a few dozen reviews is good...

Nathan

It is hard to compare Willmott to Ropes Crossing.....whilst it is great CF...the issue is resale at some point.

I looked at these....definitely Dept of Housing (Resitec) stuff....they are dreaming if they thought they would get a first home buyer to buy it.

I looked at these but did not proceed as they are in a so called problem area. I buy DoH stuff but only in locations which do not have endemic social problems. Also, the supply that the DoH intends to sell off is likely to keep prices down. On average they are selling about 10 every two months...

I prefer the Central Coast and Wollongong where the supply is much more limited and the sell of is now only a trickle with home located in areas which are now in demand. Obviously, I am not getting the same yields, I am only getting about 7.2% yield vs 8.7% for yours.

I am prepared to accept that as the CG on mine has been about 70k upon buying these. However, I am still keeping an open mind on these for the time being.

By the one oyu bought was DoH Owner Occuppier...looks like DoH has changed its mind. In my experience the good stuff tends to sell on the day for DoH auctions. The last ones myself and my mate went to ...all sold on the day.

Nathan said:

The property is in Willmot, purchase price $180,000 renovation $6000 rent $300+pw and reval around $240k.

Now others can say there was a recent sale or couple in the surrounding streets thats because I helped a few mates get into these ones at these levels also.

It needs a paint, carpet and fence and a few little nick nacks.

There is new developments in the surrounding suburb or Ropes Crossing selling for around half a million on 400sqm.

I have attached a link to pics for entertainment.

http://binvested.com.au/?p=965

Click to expand...

btw1998- 2008 Sydney went thru a massive property boom!! population + growth

My dad had a place in newtown (Charles st)- bought for around $170,000 in early 1993-...sold it in 2001 for over $850,000 - and today it's worth $1.7M

I hope western Sydney picks up for your sake Nathan and Mine as well ahah

Regards
Michael

Mick C said:

I hope western Sydney picks up for your sake Nathan and Mine as well ahah

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It will when everything else is too expensive.
He's in no hurry, with such yields he can afford to wait

http://www.realestate.com.au/property-house-nsw-willmot-107347193

This property is across the road. Mine with reno/shave will come up looking nicer then this.

Its not a comparable to Ropes Crossing, in 5-10 years when the DOH is out these suburbs will become like Ermington, Dundas, Telopia etc...

These properties will go up quickly once Dep Housing stop selling them off. This will mean the property will be short supply, and area will be much cleaner. I have witnessed the last 10 years this area clean up since my first visit to 2770 in 2001. Also when people look @ Ropes crossing @ $500-700 as it grows such as jordan springs etc... and area cleans up people will go why am I paying this when I can live across road on bigger block for 1/3 of price and houses start getting knocked down etc...

I reckon will get $320pw rent but saying $300 so people dont grill my numbers

Like Lil, I'll vouch for the numbers. I've lived in Western Sydney for a while now. Yes, you do have dropkicks, but you get them everywhere. There are a few really rough pockets, but there are many elderly people living in the H/C areas as well as single parents who keep their noses clean.

Like BV said, the area will once again enjoy some very nice CG when prices move. People are attracted to the lower price, which pushes it upwards and in the meantime the yeilds are great.