For 1st IP...Merrylands, Wentworthville NSW

[mrwho]

Hi everyone,

As my 1st IP, I was thinking of getting a unit in either Merrylands or Wentworthville. I have a budget of $300K.

From my findings thus far, most units in both suburbs are under the $300K mark and appears to be in good condition. Rental yields are good at 6% or more, plus they are both neighbouring Parramatta, so potentially some cap growth a few years down the track. Is this assessment reasonable?

Can anyone show me where I can lookup tenancy rate data? and how do I lookup if there are any housing commission around those suburbs?

Cheers.

 

[awsydney]

Hi everyone,

As my 1st IP, I was thinking of getting a unit in either Merrylands or Wentworthville. I have a budget of $300K.

From my findings thus far, most units in both suburbs are under the $300K mark and appears to be in good condition. Rental yields are good at 6% or more, plus they are both neighbouring Parramatta, so potentially some cap growth a few years down the track. Is this assessment reasonable?

Can anyone show me where I can lookup tenancy rate data? and how do I lookup if there are any housing commission around those suburbs?

Cheers.

Rental yield and tenancy rates are just 2 factors. You may want to consider capital appreciation history and future developments in Merrylands / Wentworthville for a longer term view. Talk to the local agents, Council and residents there and I'm sure you'll be able to find more pertinent info about the suburbs.

 

[Nathan]

Merrylands and these areas, I remember last year old crappy 2 bed units i was looking at for $150-170k range.

 

[Propertunity]

Rental yields are good at 6% or more,

Yes and figures here (a little of of date) to support your assessment
http://www.investsmart.com.au/property/search.asp?Suburb=merrylands&Units=1&OrderBy=3

plus they are both neighbouring Parramatta, so potentially some cap growth a few years down the track. Is this assessment reasonable?

Yes, reasonable. If you take the view that Parramatta is the 2nd CBD of Sydney, then you are buying 5 - 10 kms within this CBD = good.

Can anyone show me where I can lookup tenancy rate data?

Vacancy rates can be checked here:
http://www.sqmresearch.com.au/
Merrylands currently 2.2%. 3% is considered balanced.

and how do I lookup if there are any housing commission around those suburbs?

You won't be able to unless you have access to the industry databases that real estate agents and buyers agents have access to.

 

[moses]

I wanted to buy in merrylands but was forced into buying in mount druitt because i didnt have enough money to purchase in Merrylands.

greystanes/ Pemulwuy could be good too?

i would assume anywhere around Parramatta would be good?


Im still wondering if i made the right decision in mount druitt!

haha hope so!

 

[Propertunity]

I wanted to buy in merrylands but was forced into buying in mount druitt because i didnt have enough money to purchase in Merrylands.

Not having enough money is pretty sucky

greystanes/ Pemulwuy could be good too?

OK - but no transport

i would assume anywhere around Parramatta would be good?

You can't just buy 'anywhere' you still need to do lots of DD. But Parra area in general is fine - but you still need to choose carefully.

Im still wondering if i made the right decision in mount druitt!

Time will tell.

 

[mrwho]

Having been to numerours Auctions and OFIs in the area, I'm starting to get the feeling that prices here are getting way past what they should be worth....some really old units are now asking for $290K+. The agents are saying this is a fair price as I can expect rental of at least $330+ p/wk! ...I thought, who are they kidding!

I mean, if I was a tenant, there is no way I would pay that sort of rent for what I'm getting....haha...I think I'm not having the right mindset of an investor, but this area is is getting a bit irrational....is anyone else seeing this happening in other suburbs?

 

[travelbug]

Having been to numerours Auctions and OFIs in the area, I'm starting to get the feeling that prices here are getting way past what they should be worth....some really old units are now asking for $290K+. The agents are saying this is a fair price as I can expect rental of at least $330+ p/wk! ...I thought, who are they kidding!

I mean, if I was a tenant, there is no way I would pay that sort of rent for what I'm getting....haha...I think I'm not having the right mindset of an investor, but this area is is getting a bit irrational....is anyone else seeing this happening in other suburbs?

Are you basing your rental view on what YOU would pay or have you looked at what tenants ARE paying. What you would pay is irrelevant if you don't know the area.

I wouldn't pay $285 to live in my SMALL 1 bedder in Potts point but I know that's cheap for that area.

I looked at Merrylands earlier this year. Decent sized 2 bedders that needed a bit of a reno went for $210-220 at auction.

 

[twobobsworth]

Prices have moved since the FHOG boost. Paid $209K in May last year for a place in merrylands, rents $290pw. Very little under $250K now.

 

[Propertunity]

Having been to numerours Auctions and OFIs in the area, I'm starting to get the feeling that prices here are getting way past what they should be worth....

Without specifically picking on you, I am seeing this comment from different posters all over this forum now.

How do you thnk prices are ever going to increase in the RE cycle? There have to be times when people think "that's a crazy price" or "prices are overinflated". This is because you are comparing it to the 'old' prices.

Prices are what people are prepared to pay for either their own PPOR or their investment returns or in anticipation of capital gains. The market has moved on and you have to adjust your expectations accordingly as travelbug & twobobsworth have said.