Buying a unit Syd Lower Northshore - Advice Sought

[sydneyguy]

Dear All:

I am looking to buy a unit in the lower-lower north shore of Sydney. (e.g. Kirribili, North Sydney, Waverton )

While I am not new to property investment, there are a few burning questions really giving me the headaches and would love to get some opinions from fellow investors.

Here’s my brief situation:

I am myself working and living on North Shore, a stable job, can afford serving a loan up to 600K.

I really like the potential of Lower North Shore, as I believe that with population growth and demographic change (more singles or childless families) in the future, this area will be really sought after by renters. However some of the issues I’ve been pondering are:

1. number of bedrooms:
I am thinking of investing in a one bedder. Because I think the renters are mostly single working professionals in the city hence one bedder should be popular. Although I can also afford an old 2 bedders in Waverton.
What do you think?

2. locations/ amenities:
Do you think being close to shops and restaurants is really a deal breaker for renters (think Crows Nest)? OR proximity to the city? (think Kirribili)

3. New v.s. Old
Should I go for new or old? I think with 600K I can certainly afford an “OLD” waterview one bedder in Kirribili, or, a new one in Milson’s Point or North Sydney.
I understand depreciation, but am more concerned with future potential – a new building built in the last 10 years will last a LOT longer than an old one built in the 1920s. So what happens when an old building has really had its time? Do the owners have to folk out heaps (I’d imagine a few hundred grand each) to rebuild it? What’s your take on this?

4. View v.s. no view
Is this something definitely worth while investing into, especially in one of those really really old blocks?

5. Parking:
A parking space in Kirribili is worth 50K at least just by itself, but do you think it’s really that necessary to folk out that much to just a get 2 squares for your car? Since it’s close to the city, don’t people just take train?

Thank you for your comments in advance!

Tom

 

[im sparticus]

Dear All:


3. New v.s. Old
Should I go for new or old? I think with 60K I can certainly afford an “OLD” waterview one bedder in Kirribili, or, a new one in Milson’s Point or North Sydney.

for $60k does it really matter just go out there and buy both and while your there get a coulple for me too!

 

[im sparticus]

A parking space in Kirribili is worth 50K at least just by itself

tell them they can keep the parking and offer them $10k

 

[sydneyguy]

for $60k does it really matter just go out there and buy both and while your there get a coulple for me too!

Hah....just realised the typo..yeah, i was dreaming I was back in the 1920s!!

 

[Land]

I live in Waverton

My wife and I live on the border of Waverton and Wollstonecraft and love the area. We are renters, but with other IPs.

I would definitely go for somewhere near the train line, so the areas you are talking about would be great. I think a 2 bedder is probably better suited to most people, either couples like our situation, which gives us a spare room, or for two friends who find it far more affordable to split the rent than to live on their own in a 1 bedroom place.

I would definitely get one with a car space. Whilst I cycle to work in the CBD, my wife drives to work out of the CBD. How many young professionals do you really know who don't have a car? Maybe backpackers etc, but I think realistically most young professionals (late 20's) have a car to get around in and also get to breakfast at Manly etc on the weekends

You can buy old and renovate it (provided the entire building isn't too shabby) and claim depreciation on the new kitchen/bathroom/carpet etc. This also immediately boost your equity. Also, usually less problems in a medium aged builidng then some new buildings (sloppy workmanship), and you should go for a smaller building with less units so you're not competing with 100 other investors in the one building, and if the block is smaller, potentially no lift which makes strata fees considerably cheaper.

A view is always good!!

Fantastic part of the city and you can't go wrong really, I think.

Good luck!

 

[MichaelW]

Agree with everything Land said above:

2-bed
Close to train
Carspace
View if you can get it
The newer the better

I know its a trade off, but I've listed the above in my order of importance were I looking to live on the Lower North Shore (which holds appeal as I work in St Leonards).

For me, I wouldn't live in anything smaller than 2-bed, so that's a must. After that I'd want to be close to the train, preferably less than a five minute walk. The rest become optional. We have two cars, but if there is sufficient street parking with a "local" car tag allowing it free, then that is less of a big deal. I love views, but can live without it. And the newer the better, but not a deal breaker.

Just my personal preferences, but might be representative of market expectations.

Cheers,
Michael

PS I think its a great location and your prospects are solid for the reasons you outlined.

 

[sydneyguy]

Thanks heaps guys ! Good to get advice from the locals!

A good 2 bedder will definitely stretch my budget, but as Michael said, there's a balance.

Just been to an open house (it was a one bedder in Waverton), a LOT of people inspecting, not seeing any reflection of the recent rate hikes in this area!!

Well, more open house, here I come!!

Any other fellow investors favour a one bedroom than two?

Come on, I'd like to hear your different opinion!!

 

[im sparticus]

Any other fellow investors favour a one bedroom than two?

Come on, I'd like to hear your different opinion!!

I prefer one bedders especially a new one bedder over an old 2 bedder.

 

[Jacque]

I love this area and think it's got great potential- I've bought for clients in recent times in Kirribilli (eg $840K 2bedder no parking unreno waterfront) Waverton (eg $505K 2bedder LUG high rise walk to station renoed) Nth Sydney (eg $298K 1bedder parking unreno walk to High St wharf) Greenwich etc etc. Really great location to CBD, lots of interesting surrounds (I particularly love Crows Nest and Naremburn, Cammeray etc) walk to virtually everything and some really great buys for apartments out there.

I second Michael McNamara's recent thoughts that Syd apartments are currently undervalued- believe they represent good value for money and I'm sure others would agree.

As far as one bedders go, if you'd asked me 5yrs ago, I would have said only stick to 2beds, but times are 'achanging (Just ask Bernard Salt) and with more single households than ever before, 1beds are holding their own and seem to rent just as easily as 2bedders. To give a recent example, an IP unit I own in Gladesville is 2bed and renovated. It rents for $295 a week (just about to increase rent however with new lease) yet another unit in same building is renting at $290 and it's only 1bed. Rents are rising and demand is strong amongst renters for these units- both 1 and 2 bedders.

Best of luck with your search and keep us posted. Love to hear the details

 

[asdf]

Why would you want anything in lower north shore, its busy, traffic is shocking, restaurants and shopping centres are always packed. Theres just humans EVERYWHERE. Head out to the burbs. Yóu'll do a lot better out there with your funds. Spread the word so we can all bid up prices out west. Everyone stay away so my bus congestion can be alleviated in the mornings...

 

[feihong]

ok, I really don't know anything about the area, but, is it possible at all to find a 1 bedder with big enough living space to partition into 2 bedder?

 

[peastman]

I settled on a one bedder in Chippendale a couple of weeks ago. I feel in the right area one bedders are the way to go.
For your money you get a nicer unit in a better location.
Yield is good, I'm getting almost 6% and it will only be going up.
You dont get many tenant problems, most units are too small for big parties, and no kids to wreck the place.
More and more single people are out there and most of them rent.
One bedders appreciate just like everything else.
As far as parking goes, I'm not sure how necesary it is. Mine doesn't but it's walking distance to everything. North Shore, I think it would be worth having parking.

 

[DadOfSam]

Midweek Mass Auctions

Hi SydneyGuy,

buying's not my thing, but if you're interested in buying in upper-tier suburbs, I'd recommend you check out the midweek mass auctions that have been going on for most of this year in Sydney. They're a way of locals to sell their places without the details getting in the Sunday papers, and are usually held in a conference room somewhere.

For example, i usually do a search on realestate.com.au using the auction listings search on Monday to get a list. Or you can find a local auction house like Cooley Property Auctions, who do them on Tuesdays every fortnight (e.g they have 9 auctions next Tuesday 22/4, including 1 in Woollahra & 1 in Kirribilli). They usually have a clearance rate around 40% or so, so you might be able to catch a vendor at a time (& price) right for you.

Still, these auctions go some way to explaining why Mosman had suffered a 15 per cent fall in prices to a median of $1.775 million for the three months to March according to APM.