Opinions on Sutherland 2232 for an IP

[Mat v]

Hi all,

This is my first post as I'm new to the forum any help is appreciated. I was wondering if you could give me your opinions on Sutherland 2232 for an IP.

From what i can see it has good public transport with an express train that gets you to the city in 25 minutes and has excellent bus services also. There are multiple grocery and shopping stores to choose from along with a number of different public and high schools.

There is a decent amount of unit blocks in the area already and i've noticed that there is a lot of new blocks going up at the moment and I'm just a little worried that the area will be over saturated in the near future. Which I'm assuming will affect rental demands and CG.

I can afford to spend around $370,000 I'm ultimately looking for decent CG along with decent rental yields. Will this area give me these?

Any opinions on the area will be greatly appreciated.

Please help.

Mat

 

[Propertunity]

Welcome to the SS forum Mat.

If you have not already got a copy, this month's API magazine has an article on Sutherland - it might be worth a read.

The median unit price in the area at present is $390K. Since the median is the point at which 1/2 the units sell below and 1/2 the units sell above this price point, I see no reason why you could not pick up something for $370K OK.

Growth has been reasonable but not outstanding. There are faster growing areas, historically. 20 years ago the median price was $157K and now it is only $390K.

Generally speaking, you'd want to avoid an area with a lot of new developments as they can 'steal away' your tenants and give you higher rental vacancy.

 

[Thesnowyforest]

you should take a drive over there.

Nothing special.

For $370k you could get a 2 bedder much closer to the city

 

[Mat v]

Thanks Propertunity and Thesnowyforest for you speedy replies.

I'm only 22 and not on a large salary so realistically i'm looking for high rental yields as having cash flow is priority. The aim is to have the property positive geared asap. In saying this i also want as much CG as possible. I know that the areas that have high rental yields often have low CG and vice verser which, is why i'm a little confused as to where to look.

What would be some areas you would recommend for me to look into for a 2 bedder around $370k. I've been having a look around Hurstville, Rockdale, Kogarah, Marrickville, Arncliff and surrounding suburbs. Am i on the right track?

Thanks again

Mat

 

[knightm]

Thanks Propertunity and Thesnowyforest for you speedy replies.

I'm only 22 and not on a large salary so realistically i'm looking for high rental yields as having cash flow is priority. The aim is to have the property positive geared asap. In saying this i also want as much CG as possible. I know that the areas that have high rental yields often have low CG and vice verser which, is why i'm a little confused as to where to look.

What would be some areas you would recommend for me to look into for a 2 bedder around $370k. I've been having a look around Hurstville, Rockdale, Kogarah, Marrickville, Arncliff and surrounding suburbs. Am i on the right track?

Thanks again

Mat

Mat

Good on you for looking at 22. I no longer live there but grew up in Sutherland and surrounds. Its a generally well liked area ("the shire") and most of my friends and family want to stay whether they can afford to or not.

Outer Sydney capital growth is hard to predict when it will occur. It will happen but it may not happen overnight...cash flow is not going to be great paying 370k for a 2br unit i would think the yield wouldn't be above 6% and strata fees are gonna eat in too. Negative geared.

If you want cheaper properties with better yields go west, you can afford a house. If you are happy to go to a 1br and want the ocean go out to Cronulla. A straight purchase in any of these suburbs isn't going to be positively geared straight away. For that you need to either negotiate a huge chunk off the asking price or add serious rental value.

You could think outside the Sydney box if you want to look for higher yields.

 

[Propertunity]

Hurstville, Rockdale, Kogarah,

Too many new developments in Rockdale / Kogarah for my liking.

Marrickville, Arncliff and surrounding suburbs.

Now you're talking.

 

[Ideo]

Arncliffe is a good un. Same with Marrickville.

Top of my Sydney list at the moment, and actually looking at Arncliffe for my PPOR now that I want to get back into ownership in about 6 months. And I'm a North Shore resident.

 

[Mat v]

Mat

Good on you for looking at 22. I no longer live there but grew up in Sutherland and surrounds. Its a generally well liked area ("the shire") and most of my friends and family want to stay whether they can afford to or not.

Outer Sydney capital growth is hard to predict when it will occur. It will happen but it may not happen overnight...cash flow is not going to be great paying 370k for a 2br unit i would think the yield wouldn't be above 6% and strata fees are gonna eat in too. Negative geared.

If you want cheaper properties with better yields go west, you can afford a house. If you are happy to go to a 1br and want the ocean go out to Cronulla. A straight purchase in any of these suburbs isn't going to be positively geared straight away. For that you need to either negotiate a huge chunk off the asking price or add serious rental value.

You could think outside the Sydney box if you want to look for higher yields.

I understand that the property I purchase, whether it be in Sutherland, Arnclliff, Marrickville or surrounding suburbs closer to the city, wont be positive geared straight away but i was hoping for maybe 5 years down the track I'd at least have the rent cover the repayments. As these areas are quite close to the city i'm hoping there Is good CG there aswell. I'm talking over the next 5-10 years.

Am i wrong to think the rental yields can rise that much in the next 5 years?

Appreciate your time.

Mat

 

[Propertunity]

Rents generally keep pace with sales prices - although there is a lag effect due to rents being locked in on 6 - 12 month leases.

So a $400K property now that rents for $440pw (on a 5% yield) would/should rent for $800pw when it increases in value to $800K.

 

[Rezix]

I grew up in the shire & have to say that I have been very unimpressed with the rental yield of properties there. Demographics of residents are very insulated - predominately upper-working class, white community (not very multi-cultural). Train line is fairly reliable, but if yield is important to you I would think there are lot better opportunities around Sydney than Sutherland.