Help Needed

[Sydney_Steve]

Hey guys,

Just wanted your thoughts on a couple of different plans I have running through my head.

I own a 1 bedroom apartment in Freshwater, this was bought based on its rental yield but I only looked in the northern beaches. I bought the property for $270K in 2011, it is now valued at around $330-$350 and renting for $340. http://www.realestate.com.au/property-unit-nsw-freshwater-107382759 Probably not the best purchase but it seems to be doing the job.

I just finished my apprenticeship as a carpenter, so I figure now is a good time to make my next move with my increase in wage. Although seems like I missed the boat with the buying frenzy in Sydney.

I have $40K equity and $40K saved up so my thoughts are:

1) Renovate bathroom and kitchen at freshwater. Cost $15-$20K, maybe make an extra $10K. See renovated apartment without car spot. http://www.realestate.com.au/property-unit-nsw-freshwater-117284183. Then use the equity to purchase a house in Penrith NSW or Logan QLD

2) Don't renovate and purchase a place in Western Sydney or Logan QLD

I feel each has its negatives and positives.

Renovating the freshwater place
Pro - Will give me good experience to further my trade
Con - Will loose rental money and may not make me any capital gains.

Buying in Western Sydney
Pro - Close to home so will be able to add value renovating later down the track
Pro - Girlfriends brother is a real estate agent in Western Sydney
Con - Timing seems too late, will cost me a lot more than a year ago.
Con - Will use up cashflow and may halt my investing for some time

Buying in Logan
Pro - Added cashflow, will help me continue to invest
Pro - Might be able to buy in western sydney with added cashflow?
Con - I have Never purchased out of state, have little knowledge on the area other then seeing other investors invest in the area

If you guys need more information just ask,
Thanks ,
Steve

 

[D.T.]

Given just those 3 options, id choose the third. But it needs to fit in with your overall strategy and direction - does it?

 

[Sydney_Steve]

Given just those 3 options, id choose the third. But it needs to fit in with your overall strategy and direction - does it?

So you are saying buy in Logan and leave the freshwater apartment as is?

Maybe I could buy in Logan and soon after buy in western sydney this winter 2015?

It does not have to be western sydney or Logan.

Basically i want a property that won't halt my investing opportunities. Bearing in mind I am a carpenter and will be getting my bathroom and kitchen licence soon, so houses closer are better, but not the be all and end all.

Thanks

 

[Sydney_Steve]

My strategy is:

Next 12 months
- Buy in a high rental yield area
- Using the extra cash flow buy another property in western syndey

Next 2-4 years
- Renovate sydney property
- Renovate freshwater apartment
- Purchase another property (maybe one with high cash flow, then a high capital gains property)

My end goal is to have enough cashflow and equity so I can work part time as a bathroom builder and part time growing a property portfolio by the time I am 40. I am 29 right now.

 

[WattleIdo]

Hi Sydney Steve,
The apartment looks fine as is and I wouldn't renovate until a problem occurs - if ever. A pity to disturb a tenant at this point in time. If you can't get it rented out, then you might renovate.
You've done well with your first IP.
If you're feeling comfortable with finance, then time for next one. I'd save western Sydney for later, though.

 

[GoodDeal]

I will go for the 2nd option: Buying in Western Sydney.

In my option, there should still be some room for the area. The pros you listed should help.

 

[Dbz_Vic]

Hi Sydney_Steve, as i am trying to finalise a purchase in Logan myself (first time investing interstate too), i would say definitely look at buying in Logan vs Western Sydney. There are houses for $250,000 on 600m2 still to be had in Woodridge, Kingston area but needing a fair bit of work, and seeing that you have the skills to be hands on i would snap these ones up before they are gone forever. Distance is your only con though. Prices are constantly moving up in Logan, especially in more desirable suburbs and renovated properties in Woodridge/Kingston are selling fast as well so best to decide soon and do some due diligence. Best of luck.