North Syd and Chatswood - Yield 4.8-5.2%

[anguang01]

Hi all Investors

Firstly Merry Christmas!

On the weekend I inspected 2 possible IP in North Syd and Chatswood, the yield in north syd is around 5.2% and chatswood is around 4.8%.

With them both been a relatively good suburbs in sydney would you consider these yield to be reasonable?

2bedder in chatswood for under $500k and 1bedder in north sydney at high $300k. both close to the station and shopping centre and parks.

Where do i go and find out the pass figures e.g. what is the last 10 years growth in these areas?

Thanks

 

[Ridin-High]

www.domain.com.au click on the invest tab and type suburb name and click on it, will give you long term trend data.

I sapose that yield would be normal for that price bracket.

I purchase in a cheaper price bracket 250-350k with yields around 6%+ helps minimize the risk abit

 

[Nathan]

5% yeild, itd have to be something special to make me even consider 5% especially in todays market.

 

[GIDDO]

5% yeild, itd have to be something special to make me even consider 5% especially in todays market.

Now Nathan, you can't just leave a bald statement like that hanging there.
What do you mean by "todays market" ?

A lot of RE investors would think 5% was ok.

 

[Nathan]

i mean in todays market where you can go to other parts of sydney for 7% easy. Got 8.5% on saturday at auction.

 

[GIDDO]

8.5% sounds pretty reasonable. Well done i say.

 

[Propertunity]

5% yeild, itd have to be something special to make me even consider 5% especially in todays market.

Yes, I have to agree. If as an investor you are holding a few neg. geared properties but you still want to grow your portfolio, then you need 7.5-8% yield at today's mortgage rates to be cash flow neutral or +ve. They are getting harder to find but there are still out there.

 

[anguang01]

Thanks guys for your replies

The 7-8% yield you mentioned is general in the western suburb right? I know western surburb is growing etc and got good transportation and amenities however do you think the lower north shore would make better long term investment sense?

I'm not saying which surburb is good or bad i'm just trying to make a decision where to find my next IP. which i am finding very difficult. Wife want the safety of lower north shore, however i want to take some risk and try western surburbs! aargh!!

 

[Propertunity]

The 7-8% yield you mentioned is general in the western suburb right?

In general, yes.

I know western surburb is growing etc and got good transportation and amenities however do you think the lower north shore would make better long term investment sense?

I just ran some numbers on the last 15 years of CG comparing Chatswood with Merrylands (just to pick one suburb in each area). Chatswood wins hands down.

I'm not saying which surburb is good or bad i'm just trying to make a decision where to find my next IP. which i am finding very difficult. Wife want the safety of lower north shore, however i want to take some risk and try western surburbs! aargh!!

You have to define what you mean by "safety".
Median house cost to enter the market:
Chatswood: $1M - $1.1M
Merrylands: $350-400K
How much are you borrowing? What effect will interest rate rises have on your ability to hold through 1 entire real estate cycle?

Also depends on your own financial situation. If 7.5% yield in Merrylands means you can have a property at $zero weekly cost then maybe that is "safety"?

 

[neK]

Is 8.5% yield referring to a net or gross figure?

Ive seen places on domain advertise some pretty high rental figures, but once you deduct strata, council, water, its not even 5%.

 

[Edmond Dantes]

gross......

 

[Propertunity]

Yes - always gross yields are quoted.

Allow 1.5% as a "rule of thumb" to cover the cost of overheads.