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
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
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!