A ridiculous question!

Hi all,
Firstly, this question has grown out of reading about some seemingly incredible investment finds - and wondering if I'm looking in all the wrong places.

To all you BA's out there,

If I'm looking for an apartment, close to North Sydney, which has strong potentials for capital gains, with a neutral to positive cash flow from the outset - am I dreaming?
Furthermore, can I do all this for under 450-500k?

Be honest - Do I need to loosen my criteria? :S
 
North Sydney- not a problem with the area
Strong capital growth- yes I imagine it will.
$450-$500k should get something reasonable
Cashflow positive from day one- Ahh, there is the challenge. You would probably need about $750PW rental income to do so. Not saying you wont find such a property, but it probably wont be easy. Be aware of body corp fees, they can break the deal.
Good luck and keep your eyes open because great deals do sometimes come up if you are smart enough to recognize them.
 
If I'm looking for an apartment, close to North Sydney, which has strong potentials for capital gains,
I agree with peastman. Stong CG potential - yes.

with a neutral to positive cash flow from the outset - am I dreaming?
Yes, you're dreamin' - especially if you are borrowing all the money.

Furthermore, can I do all this for under 450-500k?
You can buy a decent 2brm around $425K minimum but this would rent for $420pw max. So around 5% yield - hardly cf+ or neutral.

There are (or should I say, were) only approx. 14 suburbs left in all of Sydney that are showing yields of greater than 6.5% for 2brm units. Prices are continuing to rise and rents are on pause, so these yields are falling too. Even to get yields of 6.5% you had to be buying @ below $250K with rents of $280-300pw. They are out there now in only 2 - 3 suburbs and are getting snapped up quickly (by people like me) :cool:

Hey, even at 6.5% yields these are not cf+ :eek:
 
Fair enough Propertunity, I would love to get that PM too ;)

Let's say you move North slightly, Greenwich area - You may be able to snap up a 3bd for 450k - Surely then you could come close to cf neutral atleast?
 
Fair enough Propertunity, I would love to get that PM too ;)
The PM did not contain any suburb names :eek:

Let's say you move North slightly, Greenwich area - You may be able to snap up a 3bd for 450k - Surely then you could come close to cf neutral atleast?
No, not a chance.
Mortgage rates are what? 6% or thereabouts. Running costs are 1.5% as a rough rule-of-thumb. So you need a 7.5% yield to get cf neutral. That means if you buy for $450K you need rent of $650pw. Not going to happen - sorry. :( Not in a 2brm unit anywhere in Sydney, anyway.

You can get 7.5% yields in Sydney - but you need the property to be giving you 2 lots of rental income - house & granny flat, say. And these would not be anywhere near North Sydney.
 
Hi all,
Firstly, this question has grown out of reading about some seemingly incredible investment finds - and wondering if I'm looking in all the wrong places.

To all you BA's out there,

If I'm looking for an apartment, close to North Sydney, which has strong potentials for capital gains, with a neutral to positive cash flow from the outset - am I dreaming?
Furthermore, can I do all this for under 450-500k?

Be honest - Do I need to loosen my criteria? :S

Hi Itk..

As prop mentions above,

Strong Capital Gain and positive cashflow do not usually go hand in hand.

You might consider the more residential areas outside the city perimeter for these sorts of returns that will still give you good CG. You might then be able to find a property with dual income.:)

Regards JO
 
Hi all,
Firstly, this question has grown out of reading about some seemingly incredible investment finds - and wondering if I'm looking in all the wrong places.

To all you BA's out there,

If I'm looking for an apartment, close to North Sydney, which has strong potentials for capital gains, with a neutral to positive cash flow from the outset - am I dreaming?
Furthermore, can I do all this for under 450-500k?

Be honest - Do I need to loosen my criteria? :S

I have no problems being honest. I'd be out of business otherwise :)

Yes, as the dad in "The Castle" would say you're dreamin'
Unless....
1. You buy something that generates higher returns eg: furnished units. There are a few of these in serviced apartments with the intial return appearing attractive, until you read the in-house management fees :eek: varying between 15-25%.

2. You buy unrenovated and throw a lot of $$$ to value add and increase the rent this way. This, unfortunately, requires immediate cash injection and thus negates your desired "cashflow positive" position.

3. Aunty Myrtle generously bequeaths you her penthouse unit in a Miller St highrise or transfers it to your name for some ridiculously cheap sum :D

As Alan as already pointed out, the gross yields at the moment are around the 5% mark, but you do need to take into consideration strata fees, as these can eat into your returns quite significantly. In the Nth Syd area these vary widely from $400-$2000 and beyond.

Re: budget. Sorry to be the bearer of bad news but $500K isn't going to get you much in this area, as you no doubt already know from scanning the net. Certainly not in 2 bedders, anyway. Best bets are nearby Greenwich, Artarmon and Lane Cove, where your money will go a little further. I know Nth Syd very well having bought for many clients in these areas. $500K will get you a nice Nth Syd studio or 1 bedder with parking or an older or main rd position 2 bedder (think Pacific Hway, River Rd etc). St Leonards also has a lot of stock and is worth considering if you're interested in 1 bedders. My suggestion, however, would be to look for something with parking. Much easier for resale down the track. Happy hunting!
 

If I'm looking for an apartment, close to North Sydney, which has strong potentials for capital gains, with a neutral to positive cash flow from the outset - am I dreaming?
Furthermore, can I do all this for under 450-500k?

Be honest - Do I need to loosen my criteria? :S



Yes and Yes

:)
 
Top