Buying first property in Sydney

[my03]

Hey guys, long time browser, first time poster, great forum you have here.

I've made the decision to buy my first property and move out of home. I just want to be pointed in the right direction.

my financial situation is im on 60k a year, no debt, I'm not too sure how much I should spend on my first property? I'm thinking of maybe purchasing a property in the 250-350k range, with a 10% deposit. I will probably live in it for the first 6 months to take advantage of the first home buyers grant and then maybe move home for another 6 months until I can afford a second property. So I'm thinking in the investment context here.

I do want to stay in the lower north shore as thats where friends, family and work are, but I'm open to suggestions.

I just wanted to be pointed in the right direction in how much of my income should i commit to servicing my mortgage and what are good areas of potential growth? What about what types of properties? should i stay away from studio appartments or are they good investments? I do want good capital growth so i can use equity to fund furture purchases.

I was thinking maybe a studio that is within walk from train station in chatswood or st leonards, or do you think I'm better off going for a older, 1 br for capital growth?

Any input is greatly appreciated, just want to be pointed in right direction for financial commitment, type of property, and areas to focus on.

Cheers

 

[jaycee]

If you're going to live in for a while, would you want it to be somwhere familair/convenient to you ?

How familar are you with costs involved ? This can help you work out a budget by what you think you might be able to service as some sort of starting point.

 

[my03]

Hi Jaycee, I do want to be in the lower north shore, I'm familiar with the area and its close to my work, friends and family. I was thinking of between Chatswood and North Sydney, choosing between studios and 1 br appartments that are close to the station. Newer studios, or older 1 br. There are also these one bedroom appartments which look like they used to be some hotel or resort, are there any nasty surprises attached to them? Why are they so cheap?

Thanks

 

[sfulop]

Hi Jaycee, I do want to be in the lower north shore, I'm familiar with the area and its close to my work, friends and family. I was thinking of between Chatswood and North Sydney, choosing between studios and 1 br appartments that are close to the station. Newer studios, or older 1 br. There are also these one bedroom appartments which look like they used to be some hotel or resort, are there any nasty surprises attached to them? Why are they so cheap?

Thanks

From what I've been told, big no no to studios. Even 1 bedroom apartments that neck of the woods will still be pretty highly negatively geared with low yields. Why don't you put up with a place further out in the West for the 6 months and then when you want to move out from your home rent closer to your work? There are places near Chatswood / North Sydney renting for $300-$350/week. That way, your still living where you want to live, close to family/friends/work, but your also accumulating your asset base at the same time.

Cheers,
Steve

 

[Propertunity]

Hey guys, long time browser, first time poster, great forum you have here.

Well welcome

I'm thinking of maybe purchasing a property in the 250-350k range, with a 10% deposit.

This issue you will have here is that the 1brm studio scenario (yes, often ex motels pre-reno, strata, sell) is difficult to get finance for if the floor area is under 50m2 (which they almost certainly will be). Lenders who will touch them (and there are only a couple) will typically want you to tip in a 40% deposit.

I will probably live in it for the first 6 months to take advantage of the first home buyers grant and then maybe move home for another 6 months until I can afford a second property. So I'm thinking in the investment context here.

That's a good strategy IMO.

I do want to stay in the lower north shore as thats where friends, family and work are, but I'm open to suggestions.

Go West young man! as the saying goes . You cannot afford lower north shore (yet). Steven has given you a good suggestion here.

I just wanted to be pointed in the right direction in how much of my income should i commit to servicing my mortgage

It's not just a matter of how much you want to commit. It is also a matter of how much a lender will allow you to commit when they calculate your serviceability. Usually about 30% of your income. Best to talk to a good mortgage broker and get a pre-approval for an amount you can borrow before you do much more.

 

[nww]

Hi Jaycee, I do want to be in the lower north shore, I'm familiar with the area and its close to my work, friends and family. I was thinking of between Chatswood and North Sydney, choosing between studios and 1 br appartments that are close to the station. Newer studios, or older 1 br. There are also these one bedroom appartments which look like they used to be some hotel or resort, are there any nasty surprises attached to them? Why are they so cheap?

Thanks

You might be referring to the old Artarman motor inn right in front of the
entry/exit pacific hwy to Gore hill expressway.
They always seem to pop up on searches for the area as the cheapest units around.

I think you will find it hard to find something decent in your price range in this area for investment purposes .

 

[cadence]

Have you thought about expanding your budget? Assuming you are on 60k gross, you may be able to get a loan of $400-$450k for investment purposes and depending on the bank. That would help enlarge the potential areas you may consider buying into.

Of course, this is a personal decision.

 

[chilliblue]

We have a 2br at Artarmon in our portfolio and having lived in for a period of time many moons ago I can see the attraction of the area.

Why not look further up the train lane as far north as Hornby or alternatively, take a look at Macquarie Park area (Marsfield).

There are often older style 2 bedders that need work done on them for around $350K and with that you take on a flatmate to help pay for the property.

 

[pennyk]

you can get 2br in Ryde for around $350K.... its not very far away from Chatswood!
Definitely get 1br rather than studio, but if you can get 2br, thats even better.

Pen