Hi All,
Today I messaged one of the local agents I know in 2770. He's new. Used to be a property manager and now selling.
So he sold a 3br villa for 385k - ~24 years old (renovated though). I messaged to get details. Told me there were 9 interested parties, with gutted buyers who missed out. The purchaser is an [astute] "investor". This villa is rented for 380pw which is well above the market rent. I believe the rent should be more like $350pw. The [astute] investor is looking for more properties.
Two years ago, you would see no buyers at these open homes and these were selling for 230k (I know the guy who refused to sell us an unrenovated one for 218k but got 225k is not happy knowing where the market is - he was another astute investor ) So anyway, @ 350pw rent, the return in 2012 was 8%. Right now the return is 4.72%. And even if we take the 'better' rent return of $380pw it's still 5%.
So what is this?! Are people crazy!? Though these astute investors mean more equity for those who invested prior
I understand yield keeps dropping..historically what has been the average yield at boom time? is it 5%, 4%, 3%? Who will be left holding the baby? An agent from Western Sydney I spoke to (mid last year), who lost a bit of money in the previous boom, told me it goes down to 3%-4%.
Thoughts? Comments?
Paging DaveM - you better not sell privately You may get $350k instead
Today I messaged one of the local agents I know in 2770. He's new. Used to be a property manager and now selling.
So he sold a 3br villa for 385k - ~24 years old (renovated though). I messaged to get details. Told me there were 9 interested parties, with gutted buyers who missed out. The purchaser is an [astute] "investor". This villa is rented for 380pw which is well above the market rent. I believe the rent should be more like $350pw. The [astute] investor is looking for more properties.
Two years ago, you would see no buyers at these open homes and these were selling for 230k (I know the guy who refused to sell us an unrenovated one for 218k but got 225k is not happy knowing where the market is - he was another astute investor ) So anyway, @ 350pw rent, the return in 2012 was 8%. Right now the return is 4.72%. And even if we take the 'better' rent return of $380pw it's still 5%.
So what is this?! Are people crazy!? Though these astute investors mean more equity for those who invested prior
I understand yield keeps dropping..historically what has been the average yield at boom time? is it 5%, 4%, 3%? Who will be left holding the baby? An agent from Western Sydney I spoke to (mid last year), who lost a bit of money in the previous boom, told me it goes down to 3%-4%.
Thoughts? Comments?
Paging DaveM - you better not sell privately You may get $350k instead