Doonside - something wrong

[MTR]

Hi All
I am not in Sydney but have a property in Doonside. Just thought I would phone a RE agent to get an idea on the market and what is happening in this area.

Property - 3 x 1 fibro, double garage, well maintained property, renovated kitchen on 598 sqm block - renting at $380 pw

Granny flat at rear (not approved) - renting at $220 pw

Both properties always rented, never vacant as there appears to be a high demand.

The properties are totally separate, with meters, separate entry etc.

I had a valuation completed about 4-6 months ago and came in at $330,000, which I thought was very low.

The RE agent told me today that if I went to auction, due to income and demand I could achieve somewhere from $450-550K

I find this hard to believe, especially considering what the val came in at??

Anyone familiar with this area, would be great to get some input.

Back to the RE Agent, I asked him to find me a suitable development site in West Syd and I may consider selling ??

Thanks

MTR

 

[see_change]

Vaguely familiar with area.

We've had reports of everywhere else around there booming so that could be the problem .

4-6 months ago recent rises wouldn't have been factored into a VALUATION.

Cliff

 

[Spades]

MTR,Imo,with that rental income i dare say the rea is not unrealistic on price estimate and sure to get a bite.
Cheers Spades.

 

[MTR]

Thanks guys, I am in shock, I knew the market was hot but this is crazy.

The development site that the agent has is in the area of Marayong, anyone know this area?? Will look at this today, never heard of it

Cheers
MTR

 

[MsAli]

Marayong is good Marisa....next to Blacktown

 

[MTR]

Marayong is good Marisa....next to Blacktown

Thanks Sana, let's see if he comes back to me, the property is not listed yet and if there is an opportunity to develop and take a profit from Doonside then I may very well consider this.

The only thing is I am going to have to research builders etc.

Cheers
MTR

 

[Spades]

+1 for Mara on comparables.Mara is in good poz and a good time to ramp imo.

 

[MsAli]

Thanks Sana, let's see if he comes back to me, the property is not listed yet and if there is an opportunity to develop and take a profit from Doonside then I may very well consider this.

The only thing is I am going to have to research builders etc.

Cheers
MTR

I will drop you a line

 

[datto]

What's all this first name basis stuff then? Some kind of loop going on lol.

 

[MsAli]

What's all this first name basis stuff then? Some kind of loop going on lol.

Accidental

 

[MTR]

I will drop you a line

Thanks, appreciate this

 

[monalisa]

Property - 3 x 1 fibro, double garage, well maintained property, renovated kitchen on 598 sqm block - renting at $380 pw

Granny flat at rear (not approved) - renting at $220 pw

.................


The RE agent told me today that if I went to auction, due to income and demand I could achieve somewhere from $450-550K



MTR

I agree with the expected sale price. The gap between rent return and price is reducing. Dual occs were $200 pw difference previously (ie $500K pp, $700pw rent) - it appears this gap has now reduced to $100pw rent.

 

[RetireRich101]

I live 5km from Doonside.
My parents and sister/brother all live in Woodcroft which share same postcode as Doonside.
My last discussion with a RE in LJ Hooker 6 months said Doonside was picking up, and it's hard to buy a 1960 fibro for $320k-$340k

I just hopped on RE.com.au, search on house below $400k. Result 4 popped up and all Under Contract.

I am on the assumption that your bank valuer did not consider the GF since it is not approved. So at $330k for the front fibro house 6months ago in Doonside might be conservative/fair market value.

If you put on the market, it is a different story. You're getting $600/wk rental, in my view, you should easily achieve over $450k in doonside for this property as there are many investor chasing for returns. The price the RE quoted is not over hyped.

it started from blacktown then marayong then doonside, and there arent anymore low-mid $300 in these area.

i think if you do another bank valuation, it probably wont go over $400k though because of the unapproved GF

there is a guy called Gary Hyunda(spelling ) Century 21 Blacktown is very helpful and sold few dual income properties, perhaps given him a buzz to get second opinion

 

[RetireRich101]

The development site that the agent has is in the area of Marayong, anyone know this area?? Will look at this today, never heard of it

Cheers
MTR

both Doonside and Marayong fall under Blacktown LGA.
I dare to say Marayong is much more superior, not because it's closer to Blacktown CBD and shopping center, but predominately better as a suburb.
Doonside still has a high % of Housing Department. In fact I just did some numbers and it's still high and even comparable to 2770.. However people's perception of Doonside is different to 2770 because it is located and share the same post code as woodcroft, a urban new suburb created some 15yrs ago and average house there is in the $600k+

As for development, one thing to watch for is that Blacktown is drafting BLEP 2013, and god knows when it will be gazette. The problem is that certain suburbs were announced for urban growth such as Blacktown itself, Mt Druitt, Rooty Hill, but not Marayong.
Also one important to watch for is, traditionally in Blacktown LGA you can build townhouse in any locality as long as you have m2, but when the BLEP 2013 is in place you cant build T/H in R2 Low Density, only in R3 Medium Density

 

[scha9799]

I agree bank valuation is very tricky, especially, re-valuation.

2 years ago, I had similar situation, bank valuation is $380,000 for my IP. But local agent say if i was going to put on the market I may get around $300,000.

I spoke to some valuers about this valuation variance. I never full understand.
My thought is the valuation depending on many different factors. first, who is the valuer working for and what's the purpose of valuation? second, what's the market condition ? third, condition of the property ?

Can someone please kindly share some wisdom on the valuation topic.
how does it really work.

 

[MTR]

Thanks for the feedback on my Doonside property, actually when I purchased this property 4 years ago now I was told not to touch the area, but at the time I was chasing cash flow and it has been a great performer, always rented and had no problem whatsoever with calibre of tenants.

Thank you all for the feedback very helpful.

I would only sell this property if I could secure a suitable development site as there is too much competition this would be a sweetener.

RR
Thanks for info on zoning, density etc. if I do proceed I will certainly need to get my head around this stuff.
Will do some research on Marayong, obviously it will be more expensive than Doonside.

As far as valuations go, it can be a nightmare, I am from Perth and the market has been rising over the last 18 months, in particular development sites. The problem as I see it in a hot market is the values that they use is over a 3 month period and that is the issue, as it does not work as the market is moving too quickly.

 

[MsAli]

Also one important to watch for is, traditionally in Blacktown LGA you can build townhouse in any locality as long as you have m2, but when the BLEP 2013 is in place you cant build T/H in R2 Low Density, only in R3 Medium Density

Buddy, would you know if there will be a new DCP coming into effect on the back of BLEP 2013? As far as I know most R3 zoned lots are small enough to not tick the boxes on the current standing DCP.

 

[RetireRich101]

Buddy, would you know if there will be a new DCP coming into effect on the back of BLEP 2013? As far as I know most R3 zoned lots are small enough to not tick the boxes on the current standing DCP.

I think it will highly likely there will be a new DCP for the BLEP 2013, as the current DCP 2006 doesn't match the initiative stated in the BLEP 2013. I would also think this be available once BLEP 2013 is signed by the Minister, but last few months Council facing backlash as the BLEP involves acquiring some private property for open space

 

[monalisa]

I think it will highly likely there will be a new DCP for the BLEP 2013, as the current DCP 2006 doesn't match the initiative stated in the BLEP 2013. I would also think this be available once BLEP 2013 is signed by the Minister, but last few months Council facing backlash as the BLEP involves acquiring some private property for open space

When do you think BLEP is expected to be approved by? I know earlier they said Dec 2013.

 

[MsAli]

last few months Council facing backlash as the BLEP involves acquiring some private property for open space

There is actually quite a bit of those. Some have been sold to private buyers just in time....feel sorry for the uninformed naive buyers who have bought 1000sqm odd blocks or corner blocks thinking they bought something awesome!