New Unit in Newtown. (Sydney) Costings ???

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From: Gee Cee Clay


Hi Guys

I have a friend that is considering purchasing a new 1 bedroom unit in the Newtown area. (Between Newtown & Stanmore)
With 1 secure car space.

Purchase price $ 355000.
Estimate rental $ 340 p.w.

I do not know this particular area so could anyone let me know the following:

Supply of similar units in the area.
Prices for similar units.
Rental $ p.w.
Supply & demand for similar units.
Future supply coming on line in next 2 yrs.
ANY OTHER RELAVENT INFORMATION OR OPINIONS???

Thanks as always

Gee Cee

Old conservative one
 
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Reply: 1
From: Rixter ®


With the figures you have quoted the unit will be very heavily negatively geared due such a low rental return. This will severely reduce cashflow in the hope for attaining a future high capital gain.

If your friend is lucky enough to be able to absorb and's happy to sacrifice the cashflow loss due to confidence of future long term growth being in excess of the losses along the way, then go for it. I for one am sure that if your friend is persistent & looks long enough then s/he will find a better deal elsewhere.

Happy Investing,
Rixter :)
 
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Reply: 1.1
From: Jerry Maguire


hi GC,
there is a lot of unit around Newtown that is 2 b/r and selling for 355K all you need is to look around.
355K for 1 bedders is too much.
tell your friend to do due-diligence on the area.
i bought a few in Newtown Square for 310K and they are 2 bedders.
all you need is to look around and you will be able to find it...
 
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Reply: 2
From: KJL .


A relevant comment might be that Newtown is student-land. Is your friend aware of this? There's no value judgments by me in this statement - just that your friend may wish take it into account, for example, tenancy's might change every academic year.

Also, I may be way off beam, but up until recently I was renting in Sydney, and if I had about $340 a week I would expect to be look in better areas that Newtown. I guess I'm just raising the issue of where the 'anticipated rental' figure comes from - is it sales guff? or an agent trying to get a listing?

KJL
 
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