Hi guys, thanks a lot for all your replies. Just a few things I still feel confused. Sorry....very slow but still learning...lol...pls don't laugh at my silly questions...
1. Why is the rental return better in Liverpool...since properties are reasonably affordable, why people still rent?
Just concern about future rental performance.
2. Except being far away from Sydney CBD, is there any other reason why properties are cheaper in Liverpool, e.g. population, safety. Just an example, I wouldn't really touch properties in Merrylands or Auburn.
3. Shall I go for house or apartment? I understand the house has bigger land and capital growth is better...from cash-flow perspective...It seems units rental return are better. don't have rich parents...try to take out as less $$$ as possible from my pocket.
Pls give me some pros and cons.
Any warm-hearted person could provide some information(articles) about what I need to pay attention while buying houses (seems more complicated than buying units)
Thank you all and have a lovely night
You ask for many questions but you must decide on the strategy that suits you best. Read some books on realestate and get more knowledege as it's really hard to answer your questions.
1. Whether Liverpool/Casula/Chipping Norton etc... these suburbs have changing demographics where similar people would rent out these properties. People rent as being new migrants they cannot buy straight away, or are poor savers, or have limited income, many reasons.....Past rentals do not guarantee future rentals. Higher yields usually mean lower capital growth (ok, just in general for all other out there that disagree - Margaret Lomas for one). As long as supply and demand forces are at play so will the rent market.
2. Infrastructure, jobs, transport, recreational facilities, earnings, schools and so on and on. Many other factors dictate property prices. Think about it. If most people in the suburb you live earn more, have more stable jobs, can afford expansive private schools, restaurants, then more people will like to live there. So will the demand increase.
3. Personal choice what you go for. I personally go for capital growth over yield but we all have to start somewhere and work out the strategy that suits us. Read a book by Michael Yardney, "“How to Grow a Multi Million Dollar Property Portfolio in your spare time” and '7 Steps to Wealth' by J. Fitzgerald or any book by Jan Sommers.
Houses you have total financial control over (only rates/water costs), and you can make changes to add value. Units have additional fees (strata/management) and any changes must be approved by the strata. There are so many others... read books and educate yourself but to reassure you, well, my brother in-law (and his family) lives in Liverpool (close to the cemetary) in a townhouse (I think complex of 6) since moving to Australia (12 years ago) and pays $380 rent. The owner is selling it right now at $360k or so, and they wish to stay there and rent forever. So the rent is as good as the tenant that rents it out....
I lived 8kms from Liverpool for 20 years (as my migrant family lived and still live there) and I survived (people will often sterotype other people). Now I live in the Lower North Shore and I only moved because I wanted my boys in better private schools (just to give you an idea in $ terms, from $515K to $2.2million).
So remember, it's not just whether it's a house or unit, but whether the overall investment property deal is right (price, yield, holding costs, vacancy, jobs, depreciation, infrastructure, etc...) and education and startegy you start with is the key... Good luck!
