Buy now in Sydney or Queensland for the long term?

[David.Phoenix]

I'd like some opinions on whether I should buy my first IP in Sydney or Queensland. My aim is to hear out different reasonings for why I should do one or the other that I may not have considered.

I would be buying now with an aim of benefitting from the investment in 30 years time (either through passive income or selling off the property) and so this would be a long term decision with an aim to grow capital growth in the short to medium term to help in the purchase of future properties.

If I was to buy in Sydney I'd be willing to go more "all in" and purchase something up to about $1m. If it was Queensland purchase I'd be a bit more reserved and look at something around 500-600k. I reside in Sydney so I'm willing to take a bigger risk in Sydney.

I've written up a list of pros for each state below. I guess my aim is to add to the lists with other factors I haven't considered.

Queensland
* Cheaper less capital invested
* Gives us a bit more flexibility for a second investment in a shorter time span quicker.
* Complications would be hard to handle. Finding a property manager etc would be harder to do remotely
* Potentially better capital growth in the short term
* Better rental yield

Sydney
* Better long term capital growth prospect
* Easier to manage
* Second purchase would potentially be at a later point in time as we'd be more financially invested.
* Potential dip/correction in the next 5 years; however if there was no dip the market would be harder to enter later.

Atm I am leaning slightly more towards Sydney as I believe long term capital growth would favour Sydney more.

Hey there,

Seeing as you live in Sydney, I would suggest that maybe investing in Sydney as your first choice is better than investing in Queensland. Even though right now, there are lots of cheaper investments in Queensland, Sydney has a higher yield rate which is better for the long term.

 

[windyzz]

Hey there,

Seeing as you live in Sydney, I would suggest that maybe investing in Sydney as your first choice is better than investing in Queensland. Even though right now, there are lots of cheaper investments in Queensland, Sydney has a higher yield rate which is better for the long term.

ummm.... I think you're mistaken... Queensland has higher yield than Sydney. You'll be lucky to get 4 % yeild if you buy a house in Sydney. Apartment is around 4.3-4.4% now these days

 

[hugh72]

Hey there,

Seeing as you live in Sydney, I would suggest that maybe investing in Sydney as your first choice is better than investing in Queensland. Even though right now, there are lots of cheaper investments in Queensland, Sydney has a higher yield rate which is better for the long term.

Sydney might be an easier choice for a first investment and this might be the best option but where exactly are you comparing? Qld?
Sorry but in terms yield thats just wrong IMO

 

[sumterrence]

To be honest, unless you are managing your investment property yourself, location has never been an issue for me, lets be realistic, will you be running around to get repair quotes and stand there watching the tradies to carry out their repair while you've got your full time job? annual leaves to me are for holidays only

By saying that. I do have a lot of friends doesn't like the idea of having investment properties in another sate because they can't drive by to check it out from time to time. But strangely the ones that I know have investment properties in Sydney, they never pay regular visits

 

[ej89]

I say don't listen to anyone and buy where you're most comfortable.. I was buying in the back suburbs of Mt Druitt for 300k and got talked out of it because apparently Sydney will have a correction and those areas are crap and Brisbane will have better capital growth bla bla bla..I backed out.. Those areas would've made me 70-100k by now..

At the end of last year, "experts" predicted SEQ to go up by 15% in 3 years... Sydney is heading that way in one year... Buy where you're comfortable buying and can sleep at night.. I don't know if I can buy my first IP in Brisbane as good as the deals are.. I've been waiting for the boom to end in Sydney for a while now..It aint ending any time soon, especially in the west.. People are just going further out to the more affordable areas..If you buy in Sydney and there's a correction at least you know with population growth people will have to live somewhere and will be buying houses....Who would've thought a 4 bedroom single storey house on 300sqm of land would cost someone 550k in Spring Farm, but it's happened..

I'm guessing if you have a million bucks to spend then you can probably take some negative cashflow weekly.. I'd go with Sydney if I had that much borrowing capacity.. Or buy one in Western Sydney and then buy one in Brisbane..

As for a correction.. I think we'll see a lot of people losing their homes when rates go up to 7-8% but I can't see that happening for years and years and that rate rise in my opinion is whats gonna stop the sydney market because peoples confidence in the property market is ridiculous..

 

[ej89]

What makes you say Qld will have better capital growth in short term? Been hearing that for a while now...approximately 1.5 years...in that period many Sydney suburbs have gone up 20-40%...

 

[Rolf Latham]

What makes you say Qld will have better capital growth in short term? Been hearing that for a while now...approximately 1.5 years...in that period many Sydney suburbs have gone up 20-40%...

Id say the property clock in QLD is a lot behind NSW and that may reflect in lag in growth....... vs some reckon sydney is 11.58

ta


rolf

 

[ej89]

Id say the property clock in QLD is a lot behind NSW and that may reflect in lag in growth....... vs some reckon sydney is 11.58

ta


rolf

Where do you reckon it is Rolf?
I've been hearing 11:30 for the past year lol

 

[sumterrence]

I say don't listen to anyone and but where you're most comfortable.. I was buying in the back suburbs of Mt Druitt for 300k and got talked out of it because apparently Sydney will have a correction and those areas are crap and Brisbane will have better capital growth bla bla bla..I backed out.. Those areas would've made me 70-100k by now...

Back in 2012 I was looking at St Marys/Whalan/Tregear etc. They were selling for 200k-235k with existing tenants paying 260-280/wk. The reason why I consider there because Syd market starting to boom and I predicted the inner rings will soon overwhelm and people need to start look further, also back than Mt Druitt already start showing growth signs so I thought I'll buy 1 step ahead of everyone else until........

I got talked out by my friends and family hammering me what an idiot I am to even think about buying there..... I've received NO supporting feedback and all just tell me to look elsewhere so I did......

This story teach me if your numbers are right and your research shows positive signs, JUST DO IT FOR GOD SAKES!!!!

 

[ej89]

Back in 2012 I was looking at St Marys/Whalan/Tregear etc. They were selling for 200k-235k with existing tenants paying 260-280/wk. The reason why I consider there because Syd market starting to boom and I predicted the inner rings will soon overwhelm and people need to start look further, also back than Mt Druitt already start showing growth signs so I thought I'll buy 1 step ahead of everyone else until........

I got talked out by my friends and family hammering me what an idiot I am to even think about buying there..... I've received NO supporting feedback and all just tell me to look elsewhere so I did......

This story teach me if your numbers are right and your research shows positive signs, JUST DO IT FOR GOD SAKES!!!!

Yep. Where did you end up buying?

 

[JDP1]

By Queensland, do you mean just Brisbane or actually mean Queensland, or south east Queensland...? There's at least a dozen major markets all doing different things around Queensland at the moment.

Just brisbane within bcc.preferably within 10 km radius of the CBD to be close to the commercial centre.
The other seq markets are not as diversified, not as economically strong, don't have as many jobs, quality nor quanity. this market is also lower risk than other qld markets.

 

[hugh72]

What makes you say Qld will have better capital growth in short term? Been hearing that for a while now...approximately 1.5 years...in that period many Sydney suburbs have gone up 20-40%...

It may not, but is might be easier to purchase well without fighting off the herds in a feeding frenzy.
The op was taking a long term view and with this in mind it doesn't matter where they purchase much providing its a good deal but I would hate to buy right at the top anywhere, I have done it before and it's a long way back. Time will eventually smooth over mistakes but it can take a long time.

 

[hugh72]

There seem to be several factors holding BN back at the moment, lower than usual population growth, higher unemployment and a weak or I could a say unstable state government. Working against this is very low interest rates and plenty of people in SYD with plenty of play money looking for a cheap home

 

[windyzz]

Buy where you're comfortable with... and it's not about timing the market, but it's more about the time in the market.

 

[sumterrence]

Yep. Where did you end up buying?

moree

got 30k equity out of it after 6 months and stayed there ever since lol.

I was lucky to bought it because the extra cash flow from this property helped me with my other properties.

to give you some figures the property in moree I bought for is $117k, for the first 12 months rented for 280/wk. now renting 250/wk but still strong cash flow positive!

 

[LeoT]

Buy where you're comfortable with... and it's not about timing the market, but it's more about the time in the market.

IMHO timing is important, doesn't have to be perfect but timing does matter. Depending on ones goal I guess. For aspirations to grow a very large portfolio as fast as possible, timing is important. Just my opinion though.

Leo

 

[pickle pickle]

Well you got a lot of different opinions on this topic, which is what you wanted.

Make a decision and stick to it. Don't sit on the sidelines umming and arghing about this. Otherwise 30 years will go past and you'll have nothing. That's my underlying advice.

 

[jerrybee]

I got talked out by my friends and family hammering me what an idiot I am to even think about buying there..... I've received NO supporting feedback and all just tell me to look elsewhere so I did......

This is my trick - once I have done my research, sought lots of feedback, and made up my mind, I don't ask anyone for any more advice (or to seek validation, because let's face it, this is what you're really looking for). I also don't tell anyone about what I'm doing and I stop reading the paper and watching the news. Seriously. Once I've made a firm decision - based on the best information I've been able to gather at that time - I then stick with it till the end of the search-contract-settlement period. I don't tell anyone about it till I've wrapped things up.

What happens if something massive changes that should alter my decision, like WW3 or a huge financial crisis? Well, I figure news that big ought to get my attention anyway. It's important to be confident in what you're doing and stay the course...and this is how I do it, for better or for worse. Otherwise there's too much second guessing and flip flopping. If you've just done months of analysis, the last thing you want is a pessimistic know-it-all upending all your research based on a few bitter remarks. I've been through it all too much myself.

 

[hugh72]

Well you got a lot of different opinions on this topic, which is what you wanted.

Make a decision and stick to it. Don't sit on the sidelines umming and arghing about this. Otherwise 30 years will go past and you'll have nothing. That's my underlying advice.

Yup, do some research and get into a market where ever you feel comfortable buying

 

[kamchatsky]

You can always buy Sydney. But the much cheaper Sydney:

http://www.remax.ca/ns/sydney-real-...istingPageSize=20&mainlist.groupByCities=true