Investing $250k in Sydney?!?

J

*Jade*

Hi there,

I'm looking at purchasing my first property in Sydney with a budget of $250k. Not a lot to play with I know, but it's a starting point and I'll be doing it on my own.
What areas do you think are going to be the next to boom?
At the moment I've been looking at 2 bedroom units around the Hornsby area - do you think this is a safe option?

Any help would be much appreciated! :)
 
Positives
- I think Hornsby hospital is havig major refurb at the moment or has had so.
- good shops/cinemas
- train station.
- schools

I think its a pretty safe option, just don't know how much growth you'd get in a unit.
 
MattR said:
Positives
- I think Hornsby hospital is havig major refurb at the moment or has had so.
- good shops/cinemas
- train station.
- schools

I think its a pretty safe option, just don't know how much growth you'd get in a unit.
Click to expand...


True - but there is no way I can afford a house!
 
Jade

As Alex said, U would be able to get houses in Blacktown suburbs.

I would prefer to go for Westmead suburb, since its exactly same as hornsby with $50K less.

Jai
 
MattR said:
Positives
- I think Hornsby hospital is havig major refurb at the moment or has had so.
- good shops/cinemas
- train station.
- schools

I think its a pretty safe option, just don't know how much growth you'd get in a unit.
Click to expand...

Why would growth be any less in a unit? If house prices go up in the area, people who can't afford houses will look at units and hence push those up too.
 
The old idea that land appreciates and buildings depreciate. While units, of course, will also go up as the area goes up, a house (with land) has redevelopment value, especially over the long term.
Alex
 
alexlee said:
The old idea that land appreciates and buildings depreciate. While units, of course, will also go up as the area goes up, a house (with land) has redevelopment value, especially over the long term.
Alex
Click to expand...

Just because a building depreciates doesn't mean a unit will have any less growth. A building can be renovated to ensure the smaller piece of land grows in value in correlation with the lands value. Say an apartment in potts point.

Purchase a house because it has redevelopment potential over a unit is a totally different issue, CG was the reason stated for possibly steering away from a unit purchase.
 
Leandro said:
Just because a building depreciates doesn't mean a unit will have any less growth. A building can be renovated to ensure the smaller piece of land grows in value in correlation with the lands value. Say an apartment in potts point.

Purchase a house because it has redevelopment potential over a unit is a totally different issue, CG was the reason stated for possibly steering away from a unit purchase.
Click to expand...

The redevelopment value comes with just selling the thing as well. e.g. an old unit has value as a place to live in, and potential to be renovated. You can't really renovate the whole unit block unless you own all of them, and value adding by just renovating the internals is not as big as being able to change the outside as well.

An old house has value as a place to live in and for redevelopment into townhouses, say. I would argue that the townhouse redevelopment adds more value, and a developer-buyer would pay more for that.

Personal opinion only, as I have never done a development, and I own both houses and units.
Alex
 
alexlee said:
The redevelopment value comes with just selling the thing as well. e.g. an old unit has value as a place to live in, and potential to be renovated. You can't really renovate the whole unit block unless you own all of them, and value adding by just renovating the internals is not as big as being able to change the outside as well.

An old house has value as a place to live in and for redevelopment into townhouses, say. I would argue that the townhouse redevelopment adds more value, and a developer-buyer would pay more for that.

Personal opinion only, as I have never done a development, and I own both houses and units.
Alex
Click to expand...

I agree that *some* houses have more redevelopment value, in that the purpose of the land can be changed. i.e. in your example from house to townhouses. But not all houses have this possibility, due to the council's zoning regulations or minimum size requirements and the block not being big enough to do so unless you own multiple houses side by side.

As for the renovation of a unit, this is possible without owning all of the units. There is no reason why you can't put forward a plan to renovate the exterior of a block of units. Especially if the owners are investors, and can see it would improve the value of the units.
 
Jade, If you buy a unit, townhouse villa etc you will find that the yields are higher than if you bought a house so your holding costs will be lower.

There are properties around your price range.
Remember that this is a stepping stone so it doesn't matter where you buy, as long as you buy something rentable and in a good location or something with potential you will be fine.
When I bought my latest IP 4 months ago I was looking around Bankstown
but I ended up buying in Quakers Hill because I came across a very good deal.

At the time there was a fibro house on the new side of Quakers Hill (nice area) selling for $250K,
I had my eyes on it but put it on the back burner because it was opposite the train line.
A couple of months later I saw the same fibro house leasing
for $270/week. Not a bad yield for a house and it also has potential for development in the future.

The person who bought it gave it a coat of paint, a clean up and put it on the market for lease.
My point is this, if you are a bit of a handy person go for a cheaper house in a nice area
and do it up. You will get better rent so your holding costs will be lower.

If you don't want maintenance issues go for a townhouse or a unit.
If you go for a unit, I recommend around Parramatta or Bankstown near the station and shopping centre but go for a relatively new building so that you also get depreciation.

Good luck.
 
MattR said:
Positives
- I think Hornsby hospital is havig major refurb at the moment or has had so.
- good shops/cinemas
- train station.
- schools

I think its a pretty safe option, just don't know how much growth you'd get in a unit.
Click to expand...

Hornsby has no shortage of units - thats the only thing I'd be wary of (house is a different story though). I agree with looking interstate or Norwest.
 
I'm with Frank- there's no shortage of units.

Try to check the growth of units in Hornsby. I'm not sure that it has been all that good.
 
*Jade* said:
Hi there,

I'm looking at purchasing my first property in Sydney with a budget of $250k. Not a lot to play with I know, but it's a starting point and I'll be doing it on my own.
What areas do you think are going to be the next to boom?
At the moment I've been looking at 2 bedroom units around the Hornsby area - do you think this is a safe option?

Any help would be much appreciated! :)
Click to expand...

Hi Jade

If you follow forecasts by those such as John Edwards from Residex then the Parra region is looking promising, given the planned infrastructure changes as well as the recent change in planning that's seen a height allowance increase (with at least one developer I've heard of stopping dvpt late last year to consider demolition to start again and put in a new DA) - I certainly would pick my areas carefully, as some streets are better than others. I'd also have a look at Westmead, due to the hospital and station setup there.

You could pick up a townhouse in Quakers Hill for your budget, but be prepared to spend time searching and negotiating hard :)

Good luck with your search and please keep us informed as to how you go!
 
BV said:
Jade, If you buy a unit, townhouse villa etc you will find that the yields are higher than if you bought a house so your holding costs will be lower.

There are properties around your price range.
Remember that this is a stepping stone so it doesn't matter where you buy, as long as you buy something rentable and in a good location or something with potential you will be fine.
When I bought my latest IP 4 months ago I was looking around Bankstown
but I ended up buying in Quakers Hill because I came across a very good deal.

At the time there was a fibro house on the new side of Quakers Hill (nice area) selling for $250K,
I had my eyes on it but put it on the back burner because it was opposite the train line.
A couple of months later I saw the same fibro house leasing
for $270/week. Not a bad yield for a house and it also has potential for development in the future.

The person who bought it gave it a coat of paint, a clean up and put it on the market for lease.
My point is this, if you are a bit of a handy person go for a cheaper house in a nice area
and do it up. You will get better rent so your holding costs will be lower.

If you don't want maintenance issues go for a townhouse or a unit.
If you go for a unit, I recommend around Parramatta or Bankstown near the station and shopping centre but go for a relatively new building so that you also get depreciation.

Good luck.
Click to expand...


Some great advice - thanks BV :)
 
FrankGrimes said:
Hornsby has no shortage of units - thats the only thing I'd be wary of (house is a different story though). I agree with looking interstate or Norwest.
Click to expand...

Interstate is not an option as I'd be living in it for a short period of time in order to get my 1st home owners grant :)
 
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