'Astute' Investors in Western Sydney

MsAli

MsAli

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 :p) 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 :D

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 :p You may get $350k instead :p
 
Are you talking about me? :D

My listing is with an agent now and has had a number of offers prior to first open just from people on the agents books all wanting to buy
 
I'm curious about this discussion re: yields.

3 years ago we bought in 2770 for $175k when the place was renting for $270pw.
Now it's renting for $295 pw but prices are ~$275k.

I agree with MsAli, poor yield now for investors who are buying...

I haven't experienced a market downturn yet so am also curious to know how/when ppl realise they are left holding the baby (and how the astute investors manage to sell just beforehand. Is DaveM onto something...??)
 
tess85 you bought at the right time imo and your return,is snuffin' to be sneezed at...Even @ 175k,IF a downturn and it could be slight,i wouldn't be concerned imo...So,,only assuming here and what has been said,DaveM is only selling to fund other ventures...I'm sure he'll be along to correct if i'm wrong.

Cheers
 
You can hold that baby for a few more years IMO - with low interest rates I can only see prices steadily rising for a few more years.

Last year I predicted 350K for house in the houso area of Druitt- this came to fruition. Now I am predicting 400K for next year - call me Nostradatto :)
 
datto said:
- call me Nostradatto :)
Click to expand...

images


You just never know..
 
You can still get a fully renoed HC house for under $385K with $350 rent.

Maybe the "astute" investor is not so astute. From the agents point of view they may see an investor that is buying everything in sight so must be astute? They may have done their research (in the last year) and thought, wow I'm on to a winner, everyuthing goes up quickly and if you compare the yields with othert areas it's average. We (Somersoftians) know the difference because we have been investing and reasearching here before the boom. Some investors also look at gross yields and fail to take into account BC fees etc.
Just last week someone on another forum asked whether he should buy a particular unit. He put rough figures. I asked if he could afford the approx $150 a week negative cashflow. He said "No'. He hadn't even looked at how much it was going to cost him.:eek: He also was excited as it had had great growth in the last 7 years. :rolleyes:

I have seen new investors get confused with CG stats. They look at the last few years, see that it has good CG and assume that it's a trend and therefore a good area to buy. They also read (and take notice) of media hype.

I'm looking closely to see how the West fares from here.

As the west started rising earlier than the rest of Sydney (contrary to other booms) I thought it would slow sooner but "experts" are still saying there will be further growth.:D Maybe you are right Datto.:p

I'm thinking I might sell one. It needs a bit of a reno so just considering whether to kick tenant out sooner or later.
 
The astute investor is an ignorant twit .....

Sorry , but that's the reality .

The astute investors bought in mt Druitt when 170 k gave you 270 rent .

I wouldn't expect returns in MT DRuitt to get much worse than 5-6 percent , but , that's the historical low base on higher interest rates , so given rates are lower we might see returns drop lower , but for those returns , that's the sort of purchase that other people make , not somersoftians ( I hope )

I do remember chatting to someone ( never saw them again ) at a SIG meeting in the mid naughties who was really happy with their purchase in mt Druitt , around 220 -230 with a 220 -220-230 rent . If they kept they'd be happy now , but they had a good 8 years of no growth and several years negative cash flow .

Cliff
 
Last edited:
datto said:
I'll take the disoriented path lol.

Name me one investor who bought and held onto their Druitt property and hasn't made money?

The same could apply to any Sydney suburb.
Click to expand...

Don't know anyone down that way I just hope all these cashed up people that sell,,all come up to QLD and spend all the cash in Brisbane like they did last time pushing up the price,but I did see a few black swans land in the river this morning while picking up the empty coke cans for the local girl guides in the park..
 
willair said:
Don't know anyone down that way I just hope all these cashed up people that sell,,all come up to QLD and spend all the cash in Brisbane like they did last time pushing up the price,but I did see a few black swans land in the river this morning while picking up the empty coke cans for the local girl guides in the park..
Click to expand...

I'm hoping that some of the BB's take a look at their equity and see that they can finally retire.
 
willair said:
Don't know anyone down that way I just hope all these cashed up people that sell,,all come up to QLD and spend all the cash in Brisbane like they did last time pushing up the price,but I did see a few black swans land in the river this morning while picking up the empty coke cans for the local girl guides in the park..
Click to expand...

Logan here I come!

You keep coke in cans up there? that's odd.
 
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