House out west or a Unit near the beach?

[itxrd]

Hey all. Me again

Met up with my financial advisor the other day and he recommended we invest in a unit in blue chip areas – ie Dee Why, Brisbane CBD. He set me up to meet the firms property consultant who I met this morning. He was recommending the same – and then slipped in that he’s a developer and has loads of properties coming up in those areas ;-)

As his places are $500k+ he reckons we should save some more and wait till his are ready to go and buy off the plan - more choice. He did say houses in Blacktown/Seven hills you could get bad tenants/neighbour there, and houses involve lots of maintenance

We have 450k. Maybe stretch to 500 if we wait a couple more months and save a bit more. Do we:

1. Go for land somewhere like seven Hills close to station.
2. Go for a 1-2 bed unit in a good area (e.g Cremorne/Dee Why). I wouldn’t go new though. 1-2 yrs old. That way its a bit cheaper, defects ironed out hopefully and can still claim depreciation

Reading Rich Dad, Poor Dad right now (I am a novice ;-)) and while units depreciate, Land appreciates. Only thing is Units = less hassle and depreciation would be good on my tax return.

What do you reckon guys?

 

[toony]

I would not buy off the developer/financial advisor. I dont believe these guys have your best interests at heart.

Buy a property yourself. I do like your idea of buying something 2-3 yrs old. My preference would be a 2 bed unit in a beachside location versus a West Sydney property.

 

[Jacque]

Hey all. Me again

Met up with my financial advisor the other day and he recommended we invest in a unit in blue chip areas – ie Dee Why, Brisbane CBD. He set me up to meet the firms property consultant who I met this morning. He was recommending the same – and then slipped in that he’s a developer and has loads of properties coming up in those areas ;-)

Alarm bells are ringing here. Has the financial advisor disclosed any commissions or fees that he obtains from the property "consultant" or developer in this case? If so, then you need to realise that you are not receiving unbiased advice.

As his places are $500k+ he reckons we should save some more and wait till his are ready to go and buy off the plan - more choice.

OTP can be a very complex way to buy and many investors aren't comfortable with buying this way. Do some more research before diving into something that isn't yet built. There is a lot to consider- do a search on off the plan here on the forum and I'm sure you'll have lots to read.

He did say houses in Blacktown/Seven hills you could get bad tenants/neighbour there, and houses involve lots of maintenance

Well of course he would poo-poo other areas if he's not likely to be making any money here with established properties Ask him what data does he base his facts on here? Not that you should rely solely on historical cg rates to decide here, but FYI Dee Why units in the last decade (cg rates 2002-2011) have averaged 3.4% whilst Blacktown houses have averaged 5.8% over the same period (Source: PDS)

You can get bad tenants anywhere- the key is to select an effective PM in the first place to mitigate your risk here. Yes houses involve maintenance- depending on age, type and condition.

We have 450k. Maybe stretch to 500 if we wait a couple more months and save a bit more. Do we:

1. Go for land somewhere like seven Hills close to station.
2. Go for a 1-2 bed unit in a good area (e.g Cremorne/Dee Why). I wouldn’t go new though. 1-2 yrs old. That way its a bit cheaper, defects ironed out hopefully and can still claim depreciation

Reading Rich Dad, Poor Dad right now (I am a novice ;-)) and while units depreciate, Land appreciates. Only thing is Units = less hassle and depreciation would be good on my tax return.

What do you reckon guys?

Itx, as you know I've read and responded to several of your posts already. It appears you jump from one area to the next, and seem to be taking the advice of many different people, some of those with agendas of their own.

Whilst it's great that you've finally made your mind up about buying an IP and seem to have settled on an area, remember what your priorities are (you've identified some already, as in preferring a lower maintenance property, for example) and try not to get too entangled in all the overwhelming amount of information that accompanies property investment.

If cashflow is important to you, it sounds like a newer property that doesn't require as much upkeep and $$$ thrown at it may be the way to go. Units "traditionally" don't appear to "generally" maintain the same level of cg that houses do, however this can change from suburb to suburb and you need to engage in further research once you've established what it is you're going to buy. Don't just concentrate on Dee Why if you do go the units route- there are a lot of Sydney suburbs to consider. I'd suggest you spend some trawling time on the net looking at what's available and where.
Happy hunting!

 

[locko24]

Hey all. Me again

Met up with my financial advisor the other day and he recommended we invest in a unit in blue chip areas – ie Dee Why, Brisbane CBD. He set me up to meet the firms property consultant who I met this morning. He was recommending the same – and then slipped in that he’s a developer and has loads of properties coming up in those areas ;-)

?

You're kidding right?

I'd seriously reconsider making a second appointment with him...

 

[bits1010]

why would you think units = less hassle ? try a dysfunctional committee, a old/deterioating strata block, doggy strata management, buildings affected by poor build quality from the developer and suddenly it is hassle X 10.

put it that way, at least with a house and a land, you can rent out the rooms separately and increase rental income, you can't do that with your new strata unit with small living areas.

the value of your strata block will be affected by any new developments, Sydney is running out of land, not units.

Jacque you really is a patient contributor !

Only thing is Units = less hassle and depreciation would be good on my tax return.

What do you reckon guys?

 

[itxrd]

Thanks a lot guys for the replies

Yes Jacque I'm all over the show. Am picking things up though thanks to all of your valuable feedback.

 

[ozmale42]

A financial advisor who introduces you to their property consultant who says to you "save more so you can buy my places off the plan?".....Run as fast as you can is the best advice I can give.

 

[itxrd]

Yes guys I did think it was all a bit strange. Felt like I was being talked into a get rich quick scheme

I am sure you will be pleased to hear (as you're probably sick of me by now ;-)) that I have finally decided on a strategy.

3-4 bed freestanding house in Seven Hills/Toongabbie 1km from station. Pref a large block but could be a small one. Min 600sqm. Pref renovated already so not too much work required.

Its good to have plan!!

Thanks so much to you all for your tips. You guys are awesome. Really, really appreciate all your expert advice!

 

[willair]

. He set me up to meet the firms property consultant who I met this morning. He was recommending the same – and then slipped in that he’s a developer and has loads of properties coming up in those areas ;-)

Well he sounds like a top bloke,just move fast enough that no one catches you,or you will pay the price for the next ten years..imho..

 

[MsAli]

Hey all. Me again

Met up with my financial advisor the other day and he recommended we invest in a unit in blue chip areas – ie Dee Why, Brisbane CBD. He set me up to meet the firms property consultant who I met this morning.
What do you reckon guys?

IT, he's not your financial advisor. He is his own and the property consultant's financial advisor Run!!

 

[First timer]

I lived in DeeWhy for a few years- 6 years ago now though- I can tell you that the new unit developments are realllllly badly built. Just go for a drive and see how poorly they are finished and the water damage etc. They look pretty bad.

In the three years I was there about 15 new large unit blocks went up in the surrounding few streets, they took a long time to sell (with hurry- only 7 units left! signs up for a good 6 months, when there were only 8 units in the block).

Another thing about DeeWhy- I thank my lucky stars I was renting there because all that unit development (this is down around the RSL area, so North DeeWhy) caused an unbelievable german cockroach infestation (the tiny indestructible ones). My landlord spent a year trying to get on top of it with professional pest control, we sprayed so much we worried our nervous systems would give out, we stopped keeping food in the unit and cooking- and still the whole place was crawling. All our neighbours on the street had the same problem. In the end we moved out. Sadly enough I heard from friends who moved into the same street two years later that they were struggling with a huge cockroach infestation and wished they hadn't signed the lease.

And one last thing- The Northern Beaches is pretty la-di-da, high socio economic etc, except for DeeWhy. We always referred to it as our local ghetto, which is awesome if you're a renter looking for something moderately affordable, but if you don't know the area don't be fooled into thinking its the same as the surrounding suburbs so the values should almost certainly be lower for the equivalent property. Unit oversupply was a big issue when I was there which was a while ago so might be fixed (again, great for renters as loads of choice). The unit I moved into had a family of about 12 living on mattresses on the floor in the loungeroom and both bedrooms and they had trashed the joint (great for me, I cleaned it up and kept below market rent for years). There were meth dealers next door, fairly friendly but stole bikes and stereos etc to fill in their income gaps. The beachfront has been seriously gentrified over the years though, cafes and restaurants galore and the council spent a small fortune doing it up.

Crime wise DeeWhy also one of the only suburbs on the northern beaches where sexual assaults and muggings happened more than once a year. It's also the only place on the northern beaches I've lived where I felt unsafe walking around at night (keep in mind this is a comparison with the other local suburbs, not Sydney as a whole).

I'd consider buying there as its probably the cheapest entry point to the northern beaches, but just be sure you're getting a fair discount to more upmarket areas like Manly Vale. And stay away from the low quality new developments!

 

[itxrd]

Wow thanks so much for that post Firsttimer. Definitely looking at Dee Why in a different light. Went for a drive there this past weekend. With 2 young kids prob best to steer clear of certain parts there right now

Thanks again

 

[Agenda]

I lived in DeeWhy for a few years- 6 years ago now though- I can tell you that the new unit developments are realllllly badly built. Just go for a drive and see how poorly they are finished and the water damage etc. They look pretty bad.

In the three years I was there about 15 new large unit blocks went up in the surrounding few streets, they took a long time to sell (with hurry- only 7 units left! signs up for a good 6 months, when there were only 8 units in the block).

Another thing about DeeWhy- I thank my lucky stars I was renting there because all that unit development (this is down around the RSL area, so North DeeWhy) caused an unbelievable german cockroach infestation (the tiny indestructible ones). My landlord spent a year trying to get on top of it with professional pest control, we sprayed so much we worried our nervous systems would give out, we stopped keeping food in the unit and cooking- and still the whole place was crawling. All our neighbours on the street had the same problem. In the end we moved out. Sadly enough I heard from friends who moved into the same street two years later that they were struggling with a huge cockroach infestation and wished they hadn't signed the lease.

And one last thing- The Northern Beaches is pretty la-di-da, high socio economic etc, except for DeeWhy. We always referred to it as our local ghetto, which is awesome if you're a renter looking for something moderately affordable, but if you don't know the area don't be fooled into thinking its the same as the surrounding suburbs so the values should almost certainly be lower for the equivalent property. Unit oversupply was a big issue when I was there which was a while ago so might be fixed (again, great for renters as loads of choice). The unit I moved into had a family of about 12 living on mattresses on the floor in the loungeroom and both bedrooms and they had trashed the joint (great for me, I cleaned it up and kept below market rent for years). There were meth dealers next door, fairly friendly but stole bikes and stereos etc to fill in their income gaps. The beachfront has been seriously gentrified over the years though, cafes and restaurants galore and the council spent a small fortune doing it up.

Crime wise DeeWhy also one of the only suburbs on the northern beaches where sexual assaults and muggings happened more than once a year. It's also the only place on the northern beaches I've lived where I felt unsafe walking around at night (keep in mind this is a comparison with the other local suburbs, not Sydney as a whole).

I'd consider buying there as its probably the cheapest entry point to the northern beaches, but just be sure you're getting a fair discount to more upmarket areas like Manly Vale. And stay away from the low quality new developments!

You got to be kidding !! You live in Dee Why 6 years ago, had a cockroach infestation and now consider Dee Why a "ghetto" with a severe crime problem and, it took you an essay to explain that!! You obviously have no idea "First timer" if you say that Manly Vale is an upmarket area of the Northern Beaches!!

Anyway, I've lived in Dee Why for 12 years, never seen a German cockroach in my unit, never been bashed or assulted walking home with my shopping from Coles and never seen homeless "ghetto" people sleeping on the streets...

WAD!!

 

[sports fan]

You got to be kidding !! You live in Dee Why 6 years ago, had a cockroach infestation and now consider Dee Why a "ghetto" with a severe crime problem and, it took you an essay to explain that!! You obviously have no idea "First timer" if you say that Manly Vale is an upmarket area of the Northern Beaches!!

Anyway, I've lived in Dee Why for 12 years, never seen a German cockroach in my unit, never been bashed or assulted walking home with my shopping from Coles and never seen homeless "ghetto" people sleeping on the streets...

WAD!!

agreed!! i lived in DY for 3years my unit never had any of these problems?? which street where you in?? sure DY isnt quite as pretty as soon of its neighbouring suburbs but trust me i made good money off my unit and only held it for 3 years!! i reckon its a great suburb for starters go for an older unit close to beach banksia or over the back its quieter and cheaper westminster, regent etc good luck