is this a smart investement?

i went to this auction, even considered buying it until i witnessed the first bid of 650k...anyway here is the place being advertised now for rent...
http://www.domain.com.au/Public/PropertyDetails.aspx?adid=6394484

no renovations, has a granny flat but its not seperate to the house, it actually takes up the living space of the primary residence, so its not that great...

These people paid $785k for this, and they where ruthless at the auction, there were many people there who were interested buyers as owner occupiers just trying to get into the market only to have these people, outbid everyone and now to put it on the market at $550 a week as an IP.

what do you think?
 
I know nothing about the area as I am a melbournian. Could they be Chinese investors as the agent is a Linda Yuan?
 
These people paid $785k for this, and they where ruthless at the auction, there were many people there who were interested buyers as owner occupiers just trying to get into the market only to have these people, outbid everyone and now to put it on the market at $550 a week as an IP.

what do you think?

Why ruthless? coz they bid more and put it for rent afterwards?
 
My thoughts:
1. Pay $785K and then rent it for $550pw = 3.6% yield = pretty poor. Most investors buy a house with a flat to get 7-8% yield :rolleyes:
2. The flat set up does not sound ideal - they could do much better in terms of property selection
3. Looks like it could have been over-paid by about $100K min. :confused:
 
yep, asians....:confused:

Sure looks like they overpaid, but some Asian investors (perhaps the minority) sees Australian property prices as cheap compared to where they come from. For example, a landed property in Shanghai would have cost heaps more in relative terms.
 
Hurstville

Hiya

Also do not underestimate the power of "non-financial" reasons; is there a very "good" primary school or high school (selective) around?

Cheers
 
Hiya

Also do not underestimate the power of "non-financial" reasons; is there a very "good" primary school or high school (selective) around?

Cheers

yeah there is, Danebank, is just around the corner, but its only a girls school...

i just looked at another property that was bought for 885k although in a desirable but personally i feel is over rated in Oatley, Sydney just recently and is now advertised for rent for $460 per week for a 2.7% yield...:eek: :confused:

Ad for sale
http://www.realestate.com.au/106101402

Ad for Rent
http://www.realestate.com.au/realestate/nsw/units/404257904

it just looks like these are not primary IP's but people renting them out possibly until they move into them...
 
well yes, i think because they paid way over the reserve to get it (135k)... i guess they must know something i dont.

No; they are humans.

And, what humans tend to do when they have an abundance of money is spend it.

And, there are a lot of very intelligent people who earn very good incomes who are financially illiterate, or at best; challenged.

This is possibly the number one reason why you see such massive swings in values of properties at the top end.
 
As an investment it is no doubt TERRIBLE, but as a PPOR it's okay if they absolutely love the place and it's their dream home I suppose.
 
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