Is unit in Hornsby a good IP buy?

[china]

http://www.realestate.com.au/property-apartment-nsw-hornsby-112695599

Would appreciate your thoughts on unit as IP in Hornsby?

As I see it:

Pros:

Hornsby: sustained capital growth over the past ten years.
Unit is close to westfield / train station
Double brick construction in three storey walk up
About ten years old
Low strata fees

Cons:

Too many units in hornsby
Unit block mostly tenants
standard 5% gross rental yield

A good first IP investment?

 

[Shahin_Afarin]

Im not a fan of units but:

1. I like Hornsby due to the medical centre, hospital, major train station, westfields, influx of restaurants and of course the RSL.
2. Stable area and good demographic
3. Its low rise unit - I can't imagine the strata will kill you
4. Scope to renovate the property (floor and kitchen) but can rent day dot

How much are they asking?

 

[china]

Im not a fan of units but:

1. I like Hornsby due to the medical centre, hospital, major train station, westfields, influx of restaurants and of course the RSL.
2. Stable area and good demographic
3. Its low rise unit - I can't imagine the strata will kill you
4. Scope to renovate the property (floor and kitchen) but can rent day dot

How much are they asking?

They are asking 480k, probably rent for 460 dollars a week. Is this a reasonable buy? Will be negatively geared, hope for continued capital growth.

 

[Shahin_Afarin]

Reasonable buy in what sense? Many will argue but for me its a passive investment. More of a 'go about my business whilst being happy owning a stable investment property'. I would take the $480k and buy land, get the same return but have the potential to develop down the track.

However is this option for everyone? No so it really depends on the individual.

Having said that - what value would a reno add to the property? Maybe there is some scope there?

 

[Rixter]

China, what and where to buy is dependent upon your chosen investment strategy.

You see property is merely the vehicle. The strategy is how you intend driving that vehicle.

Unfortunately the mistake I see newbies and sometimes not so newbies is that they are property focused instead of strategy focused which is like putting the cart before the horse.

Property investing is not about property rather about the strategy and the way you intend to use the vehicle to get to where you are wanting to go. No good buying a small shopping car if you intend driving interstate on a family holiday.

What strategy/s are best for you is determined by where you are wanting to go, the time frame you want to get there in and how hands on along the way you want to be - all based around your personal risk profile.

I hope this provides some food for thought.

What is your chosen investment strategy?

 

[westminster]

Couldn't you buy a nice house like this and whack a GF in the back?

Very easy to turn the house into a 4 x 2 by closing up the dining room.

http://www.realestate.com.au/property-house-nsw-hornsby-112387155

Cost $750k - rents hmmm $400 + $600?

 

[Aaron_C]

Honestly with your budget china I think you can afford to buy something a whole lot better that will make you money much more quickly. This is the sort of thing that a first home buyer or a young investor would buy due to budget constraints.

 

[DaveM]

Couldn't you buy a nice house like this and whack a GF in the back?

Very easy to turn the house into a 4 x 2 by closing up the dining room.

http://www.realestate.com.au/property-house-nsw-hornsby-112387155

Cost $750k - rents hmmm $400 + $600?

Unfortunately no, NSW planning prevents GF's on already subdivided lots

 

[Angel]

Nice unit in Hornsby. But whose idea was it to place the toothbrushes on top of the toilet in the bathroom photo.

 

[DaveM]

Nice unit in Hornsby. But whose idea was it to place the toothbrushes on top of the toilet in the bathroom photo.

They are scented sticks not tooth brushes

China are you sure about it only being 10 years old? The kitchen and building design peg it as a 90's block to me. I used to live around the corner in Albert St in 1999-2001 and I am pretty sure that complex was there when I was living there. It will play a big difference in depreciation if its another decade older than you thought.

 

[china]

China, what and where to buy is dependent upon your chosen investment strategy.

You see property is merely the vehicle. The strategy is how you intend driving that vehicle.

Unfortunately the mistake I see newbies and sometimes not so newbies is that they are property focused instead of strategy focused which is like putting the cart before the horse.

Property investing is not about property rather about the strategy and the way you intend to use the vehicle to get to where you are wanting to go. No good buying a small shopping car if you intend driving interstate on a family holiday.

What strategy/s are best for you is determined by where you are wanting to go, the time frame you want to get there in and how hands on along the way you want to be - all based around your personal risk profile.

I hope this provides some food for thought.

What is your chosen investment strategy?

Thanks Rix.

I need to create at least 100k p.a. of truly passive income. I wish to deploy available equity in PPOR and cash savings to generate such an income stream using a mixture of property and share holdings.

With the property investing side of things, I need a strategy similar to the one that you have described, that is, growing equity by capital growth. I would prefer positive cash flow but can afford some negative gearing, holding out for capital growth over time.

I do not wish to build or do renos as I know nothing about these and do not have the time and inclination to be involved in any building matters. Therefore, I need to buy well and buy a few in order to get capital growth.

Is that enough strategy?

 

[china]

Honestly with your budget china I think you can afford to buy something a whole lot better that will make you money much more quickly. This is the sort of thing that a first home buyer or a young investor would buy due to budget constraints.

I would like to spend up to one million dollars.- ppor equity and loan. I get conflicting advice regarding buying a few small units like the one I have posted in Hornsby. Or I should try and get a single commercial property. I would like to purchase within 15km of Sydney CBD as I live here and have some familiarity with it. I am very conservative and could not imagine investing interstate or far off places: certainly not with my first foray in property.

What do you recommend?

 

[china]

Couldn't you buy a nice house like this and whack a GF in the back?

Very easy to turn the house into a 4 x 2 by closing up the dining room.

http://www.realestate.com.au/property-house-nsw-hornsby-112387155

Cost $750k - rents hmmm $400 + $600?

I don't think that I can really do any building or renos. It has taken me a long time to get to this stage and I think that with my first foray into property, I would like to keep it as simple as possible, collect rent via a good property manager and hope for CG.

 

[china]

They are scented sticks not tooth brushes

China are you sure about it only being 10 years old? The kitchen and building design peg it as a 90's block to me. I used to live around the corner in Albert St in 1999-2001 and I am pretty sure that complex was there when I was living there. It will play a big difference in depreciation if its another decade older than you thought.

At most it would be 15, no more. My sister used to be an owner/occupier in this complex and she vouches for the soundness of the building. She sold her 2 bed unit for 380k about five years ago and still regrets it.

 

[Aaron_C]

I would like to spend up to one million dollars.- ppor equity and loan. I get conflicting advice regarding buying a few small units like the one I have posted in Hornsby. Or I should try and get a single commercial property. I would like to purchase within 15km of Sydney CBD as I live here and have some familiarity with it. I am very conservative and could not imagine investing interstate or far off places: certainly not with my first foray in property.

What do you recommend?

I am not 100% familiar with the market/prices in Sydney but as a general strategy your problem is not cashflow so you are better able to purchase properties with maybe a bit lower yield but with more appreciation due to capital growth of land size - certainly in areas like Hornsby. If you are looking to invest in property at your life cycle you would want to focus on capital growth as this is what gets people rich, not being cashflow positive by $2,000 pa.

 

[china]

I am not 100% familiar with the market/prices in Sydney but as a general strategy your problem is not cashflow so you are better able to purchase properties with maybe a bit lower yield but with more appreciation due to capital growth of land size - certainly in areas like Hornsby. If you are looking to invest in property at your life cycle you would want to focus on capital growth as this is what gets people rich, not being cashflow positive by $2,000 pa.

I would like to get to 100k p.a. passive income within the next five years and hopefully my portfolio can continue to sustain that indefinitely.

So are you recommending that I get an old house with land in Hornsby or Chatswood and be negatively geared for about ten years? I would like to wind down my work after another five years or whenever I have accumulated 2 mil unencumbered assets: cash, shares, property etc. so it is possible that negative gearing or tax deductibility ceases to be a factor at that point in time.

 

[Ideo]

Unfortunately no, NSW planning prevents GF's on already subdivided lots

Having a look under Part 2 Division 2 of the SEPP and no luck finding anything about that...

As long as it meets the lot requirements and the zone and isn't community title or strata title it shouldn't be an issue.

 

[DaveM]

Having a look under Part 2 Division 2 of the SEPP and no luck finding anything about that...

As long as it meets the lot requirements and the zone and isn't community title or strata title it shouldn't be an issue.

OK I remember reading something about it, definitely not if its strata/community, perhaps it was to do with subdivision of an already subdivided lot. Someone like Brazen can probably clarify.

The property in that link was a subdivision already, depends on how it was done.

 

[Aaron_C]

I would like to get to 100k p.a. passive income within the next five years and hopefully my portfolio can continue to sustain that indefinitely.

So are you recommending that I get an old house with land in Hornsby or Chatswood and be negatively geared for about ten years? I would like to wind down my work after another five years or whenever I have accumulated 2 mil unencumbered assets: cash, shares, property etc. so it is possible that negative gearing or tax deductibility ceases to be a factor at that point in time.

Since you already have lots of cash there will not be any negative cashflow in any case. You should maximise the use of what you already have, which most people would give their right arm for. As with anything, the more money you spend, the better quality asset you get as there are less people who are competing in that space. Then you chop it up into smaller bits for the stragglers to purchase and they pay you more per sqm. Have always purchased top-end stuff and has always served well - property going from $1.5m to $3m in 6 years and managing only one tenancy beats managing 5 small units which may/may not have the same growth with much more management and headaches. All this without any subdivision or tricks.

 

[Angel]

They are scented sticks not tooth brushes

Ha, I look like an idiot!