Does Buy and Hold strategy work for apartments?

[pennyk]

I'm just beginning to do some research on IPs, with a plan to buy in around 6 months, depending on how our debt reduction work continues. I have an area in mind, which is around 12km from Sydney, in an area with growth in infrastructure.
Our budget will allow us to buy a unit/ apartment in this area.
I'm wondering whether "buy and hold" works for apartments, or whether its better to buy and sell.
My reason for asking is that we used to own an IP in Northmead. We bought at mid-cycle, before prices went totally crazy. We bought it new at around $290K. We had to sell for financial reasons, right at the top of the cycle, for 350K. The apartments are now advertised for between $300 and $330K (i imagine they are selling for around $315-$320. Which doesn't seem to be much of a capital growth, for around 6 years!! They were obviously overpriced initially.
Our PPOR on the other hand was purchased for around 280K, went up to around $600K at the peak and now is around $500K. So, still a significant capital growth
But I'm wondering whether this is normal unit pricing... that the prices go up and down with the cycle, but don't really appreciate that much overall... in which case, it may be better to "trade" them, rather than buy and hold.
Do others have experience with units growing significantly in capital through the whole cycle?
Pen

 

[The Y-man]

There's no reason why you shouldn't get some capital gains on an apartment, so long as there is a general scarcity of

1. land - a block of apartments in a suburb full of houses is probably not a good thing

2. other apartments or potential for other apartments - an apartment in a block of 200 with another 3 towers of 300 apartments being constructed next door is not a good thing.

Cheers,

The Y-man

 

[sailor]

All the properties in my portfolio (bar one) are units. I just love 'em. Easy to maintain, and I've had nothing but good CG over the years. The last one I bought 12 months ago for $150K is now worth over $200K. And in that period the rent has gone from $150 pw to $280 pw. (Twas a tad under-rented by the previous owner!) Happy with that.

 

[timbo.]

I bought a unit in Sydney (Pyrmont) in 1999, and it has doubled in value since then, so you can get some good results from buying and holding units.

Things about units that I'm very much aware of now are the size of the development and the strata levies. I bought in a massive (200+) unit development and the strata levies are about 1K a quarter (who needs a pool and gym anyway??).

Its worked out pretty well for me, but I would probably go for something in a smaller block without the pool and gym (great for tennents, not so great for landlords).

 

[sailor]

Its worked out pretty well for me, but I would probably go for something in a smaller block without the pool and gym (great for tennents, not so great for landlords).

I prefer small blocks (4-8 units) with a pool. Up here in FNQ people like to rent a place with a pool.

 

[oasis1frog]

All the properties in my portfolio (bar one) are units. I just love 'em. Easy to maintain, and I've had nothing but good CG over the years. The last one I bought 12 months ago for $150K is now worth over $200K. And in that period the rent has gone from $150 pw to $280 pw. (Twas a tad under-rented by the previous owner!) Happy with that.

Are they apartments (flats) or units & villas with own backyard ?

 

[sailor]

Are they apartments (flats) or units & villas with own backyard ?

• 5 units in a block of 6.
• 2 units - single title with big yard.
• 2 units - single title with big yard...different location to one above.
• 4 units - single title with big big yard
• 2 commercial units in a block of 8 with almost no yard.