After some direction in the NSW market.

[devo76]

Hi all. Suffering a bit of info overload at the moment. I will be in a position to purchase Ip no 2 in about 6 months if the market is right. Ive considered a few places but would like some more thrown at me so i can do some research.
Budget of $250 to $450,000
Hold long term
Unit in city or house in regional areas.
Reno potential or sub potential would be good.
Sydney or Regional NSW
Can handle neg cash flow of around $150 PW after tax.
After growth over cashflow.
Thoughts so far.
Cronulla,brighton le sands,( anywhere Coastal or central in sydney basically)
Budgwoi
Muswellbrook
South coast nsw( Live in Nowra and could do a reno easily).
Any thoughts would be appreciated.
Like to know peoples thoughts on what has potential in NSW over the next 5 to 10 years.
Thanks

 

[Jacque]

Hi Devo

You might find this interesting- written largely by Michael McNamara (Aust Property Monitors) - the Good Suburbs Guide to Sydney, just recently published in the SMH.

http://www.domain.com.au/Public/Article.aspx?id=1212259058980&index=NationalIndex

I've commented on it before both here and over at invested.com.au and, for your budget in units closer into the CBD, would take a look at North Sydney, Artarmon, Lane Cove, Waverton, just to start. You'll get mainly 1bedders for your money but may be lucky enough to pick up something unrenovated in the 2bed market.
Otherwise consider good old Ryde (undergoing big dvpts and new shopping centre- also has good transport links) Gladesville (also near water) and the Epping area for units.

As for houses, not as much choice here in Sydney and you're restricted to the outer suburbs, but consider those near train lines and good bus routes. Eg: Quakers Hill, Seven Hills, some North Parra suburbs have some bargains for houses at the moment, especially if you're prepared to renovate.
Please note these are my opinions only, and restricted to the north and northwest side, which I'm very familiar with.
Happy searching

 

[devo76]

Hi Devo

You might find this interesting- written largely by Michael McNamara (Aust Property Monitors) - the Good Suburbs Guide to Sydney, just recently published in the SMH.

http://www.domain.com.au/Public/Article.aspx?id=1212259058980&index=NationalIndex

I've commented on it before both here and over at invested.com.au and, for your budget in units closer into the CBD, would take a look at North Sydney, Artarmon, Lane Cove, Waverton, just to start. You'll get mainly 1bedders for your money but may be lucky enough to pick up something unrenovated in the 2bed market.
Otherwise consider good old Ryde (undergoing big dvpts and new shopping centre- also has good transport links) Gladesville (also near water) and the Epping area for units.

As for houses, not as much choice here in Sydney and you're restricted to the outer suburbs, but consider those near train lines and good bus routes. Eg: Quakers Hill, Seven Hills, some North Parra suburbs have some bargains for houses at the moment, especially if you're prepared to renovate.
Please note these are my opinions only, and restricted to the north and northwest side, which I'm very familiar with.
Happy searching

Thanks. This is the sought of info i am after. So many suburbs in the city i find it hard to narrow search.

 

[stumunro]

in the latest HTW report some regional markets have changed from declining to bottom of the market and or rising, which might interest you

Bathurst
Orange
Dubbo
Wollongong
Wagga Wagga

Note: This is only from one source

 

[dedfred]

Hi Jacque & Devo,

I'm in the market for IP no:2 as well, I initially thought I had a borrowing capacity of may around the high $300's but got shot down to the low $200's. Well, that's not going to make me stop, just need to look in different places now with a different budget.

I'm looking at Sydney and with my budget will be looking at units. I plan to buy one of the residex reports to help me lock in a few suburbs, but I just seen Jacque's post and looked up some of the suggested area like:

NORTH RYDE, North Sydney, Artarmon, Lane Cove, Waverton, ryde, GLADESVILLE, EPPING.

Really good spots but for my budget I can see 1 bdr’s with decent rent but ridiculous strata fees. Is this something to expect? For example there a 1B-1T-1G in Artarmon with these associated costs:

Water $104.00 p.q approx
Council $188.00 pq approx
Strata $910.00 pq approx

Now, the question is....is this what I should expect when I look at buying a unit within my budget in good suburbs?

I'm looking at capital growth and as everyone else want to build a solid property portfolio to fund my early retirement. If I can get some guidance on what and where I can get for my nominal budget and an answer to my question on strata cost it would be most appreciated.

Trev

 

[Jacque]

Hi Trev

Low $200K's is a stretch, especially in some of those suburbs mentioned, even impossible, I'm afraid.
Have you considered Sydney's second CBD- Parramatta?
There was an article on in in this weekend's SMH Domain which you may find interesting reading. Lots happening with Civic Place, new dvpt and riverside upgrades. It's certainly got promise and may well suit your budget and requirements better.

Re: strata fees. These can vary widely depending on age and size of block. Anywhere from a $150 + really. Standard strata fees for a 3storey walk up in Sydney without any "extras" like lifts, pools, gyms etc would be approx $350-600 per quarter. $900 is on the pricey side, and I'd be conducting some more investigation into why it's so much.

Hope this helps

 

[dedfred]

Hi Trev

Low $200K's is a stretch, especially in some of those suburbs mentioned, even impossible, I'm afraid.

Hi Jacque,

Thank you for your reply and believe me when I say I know I'm pushing by buck to the limit. I will look at alternate suburbs like Parra etc and thanks for the info in relation to Strata as well.

This is a question to all out there. How do you property guru's work it? I know the theory is to buy a property every two years if not every year, but this is dependent on the banks, your borrowing capacity and the market’s performance which is relative to the equity you build up in your existing property's.

I'm just a bit frustrated with the bank, I know they're looking out for me by begin conservative with their figures but that also means I don’t have much to borrow, which in turn limits my options. I guess I can look at non prime suburbs and get myself a 1 or 2 br unit. But the question is how did the property guru's who have a dozen if not twice as much of houses/units etc, did you guys work two jobs to show the banks extra cash flow or was it to do with your partners working as well so you had two incomes to work with or was it just smart buying in the right area at the right time so you’ll had heaps of equity to play with at all times.

There was a brilliant post by Rexter in one of the other topics in this forum on how to build up to the magic number 10 property but if I'm struggling to borrow enough for no:2, does it get harder or easier.

I guess I'm being a bit naive as there are other folks out there who are struggling to start into the market, but I just want to get an idea on how you guys did it. In such a situation that I'm in with only 200K to play with, would you leave NSW and look for IP's interstate may?

Please share your thoughts and experiences.

Trev

 

[skuzy]

How do u go about identifying if houses within a suburb or the suburb itself are at their peak?

 

[Jacque]

Hi Jacque,

Thank you for your reply and believe me when I say I know I'm pushing by buck to the limit. I will look at alternate suburbs like Parra etc and thanks for the info in relation to Strata as well.

This is a question to all out there. How do you property guru's work it? I know the theory is to buy a property every two years if not every year, but this is dependent on the banks, your borrowing capacity and the market’s performance which is relative to the equity you build up in your existing property's.

I'm just a bit frustrated with the bank, I know they're looking out for me by begin conservative with their figures but that also means I don’t have much to borrow, which in turn limits my options. I guess I can look at non prime suburbs and get myself a 1 or 2 br unit. But the question is how did the property guru's who have a dozen if not twice as much of houses/units etc, did you guys work two jobs to show the banks extra cash flow or was it to do with your partners working as well so you had two incomes to work with or was it just smart buying in the right area at the right time so you’ll had heaps of equity to play with at all times.

There was a brilliant post by Rexter in one of the other topics in this forum on how to build up to the magic number 10 property but if I'm struggling to borrow enough for no:2, does it get harder or easier.

I guess I'm being a bit naive as there are other folks out there who are struggling to start into the market, but I just want to get an idea on how you guys did it. In such a situation that I'm in with only 200K to play with, would you leave NSW and look for IP's interstate may?

Please share your thoughts and experiences.

Trev

Hi Trev

Forget about gurus and theories- investing is about your situation, your comfort zone and your money

The idea with buying multiple properties over a long period of time (asset building) is to wait until enough equity has accrued in each property (whether or not through time or value adding or a combination of both) so that you can comfortably draw down on it, to invest again. Usually, investors use the equity as their deposit and costs to fund IP no. 2, take out another loan and start again.

Your best bet really is to chat to either a broker or your preferred lender about your options, serviceability and cashflow situation. From there you'll have a clearer idea of where you're headed.

As to buying interstate or even regional, that's your choice. Do some research and find out what's happening where and you'll definitely widen the search parameters if you do decide to look outside Sydney.

 

[Witzl]

Dedfred... perhaps you should have a look at St Marys and surrounding suburbs. You can buy some older houses out there for low 200s, and even sub $200K! These are usually on a 550-650sq.m block, with a very rentable 2-3bed house.

Pick one that looks a bit average, needing some paint and the floorboards polished, and you should be able to get really good rent for it (around $250/wk in St Marys).

Have a look at the RPdata free suburb report for St Marys - it went BIG in the last boom. The area is also undergoing gentrification with several knock-down-rebuilds, transport and roads infrastructure is being improved, and the main shopping hub of St Marys is about to get a big overhaul to bring it into the 21st century.

I think you can tell i like the area

 

[sash]

Also Terry Ryder has listed St Mary's as one of the ugly duckling areas which could turn into a Swan in the future. They are building new developments at the old North St Mary's site ....the houses there start at 350k plus on very small blocks.

I am increasingly looking at the suburbs along the Bankstown line from say Campsie onwards - like Belmore & Wiley Park.

For example in Wiley Park you can get a rough 2br unit for say 155-160k. Paint, carpet, and clean-up and you can get $250pw.

The other areas to look for bargains are Guildford, Fairfield, and Liverpool suburbs.....homes are selling for 230-270k with a clean-up your get 300-350 in rent.

Have a look at the RPdata free suburb report for St Marys - it went BIG in the last boom. The area is also undergoing gentrification with several knock-down-rebuilds, transport and roads infrastructure is being improved, and the main shopping hub of St Marys is about to get a big overhaul to bring it into the 21st century.

I think you can tell i like the area

 

[stephenb465]

I'm in a simula postion to Devo76, but I have upto $600k for an investment propert,

I have been told to invest in well selected, boatique apartment with views on the lower North shore, BUT is that really the best option? I look at the costs of running the apartmen ie strata fees... via the income.

do you think that a house would be better in places that have been recommended above like, North Ryde, North Sydney....

I'm just over loaded with infermation and don't really know which way to turn, my goal is growth as I can survice the loan OK, I work away overseas and thus connot mantain the IP

 

[contrary]

good luck

good luck getting a brick house in Ryde for under 600k. It has gone up ++ with the LCT, proposed train station and may have peaked in the short term, in my opinion anyway.

St Mary's ugly but more compelling. I also like blacktown or surrounding for a house. Bankstown, that has to bottom at some stage despite the ethnic tension problem.

For a townhouse, why not try artarmon near the station. You should be able to get under 600k near train station. Problems with strata however, but I think it has more potential for CG than townhouse in say north ryde, or upper north shore for 450-550k, but maybe I am wrong .

Good luck !

 

[dedfred]

Thanks guys

Hi Witzl, Sash & Jacque,

Thank you so much for your replies. Jacque, your post is really good and is something I needed to be shot down and remember the basics. Sash and Witzl, thanks for the tips on the inner west suburbs...to be honest I really haven’t paid much attention in my own backyard (Sydney) and have been concentrating on QLD over the last week.

The good news is my mortgage broker has been able to get me some more cash (max 380K) but I want to stick to the $250K - $300K mark. I need to run up the numbers to make sure I can service all the loans. No sense in going broke.

Thanks again guys...I'll come back when I have my eyes locked into some suburbs.

Time for some number crunching and research.

Cheers