Options for IP in NSW

Hi SS-ers,

2014 been a great year for all of us :)

I am planning to purchase another IP in Sydney this year. By popular belief, it has been known that Sydney is at the end of its cycle. Some people have been suggesting Brisbane and the word has becoming more and more hotter since last year. However, I felt more comfortable to grow my investment in the place that I am familiar with.

There are few options that I can think of for me to invest at the moment. My budget limit is around 700k. I am looking to invest in a non-unit property type since my first IP was a unit.

My overall strategy is to buy and hold as many as I can, then reap within 5 - 10 years.

I started to look around, price seemed to be over my limit. The areas that I can think of are : Toongabie, Black Town, Quakers Hill, Merrylands, Holsworthy, The Ponds, Stanhope Garden(these ones are over my budgets : Kellyville, Castle Hill)

What is your opinion about Sydney market at this stage? Any suggestion on my plan? Any better advice in regards to the property location?

Alternatively, any thought on investing in more units rather than house?
 
From what I have heard Sydney and Western Sydney is pretty much at its peak. You may be better investing in regional NSW or heading up to Brisbane which seems pretty popular at the moment. I know a few people who have a heap of units and they seem to be doing very well out of them even with all the strata fees etc.

Looking at the Ponds around Christmas time its amazing how much that place has grown my last visit was back in 2008. I definatly wish I had money to buy land out there back then as the prices of land have just taken off its pretty ridiculous.

Im currently looking to invest in regional NSW mainly because my budget is around 200K. Who knows though can Sydney keep going up wish I had a crystal ball
 
brocky, have I got a deal for you!:D

You guys need to do the numbers for investment purposes rather than for location because the better areas have hit their peak.

It's cyclical, so it will come around again, and again, and again.

Despite what some hysterics will try and advise you.
 
Im currently looking to invest in regional NSW mainly because my budget is around 200K. Who knows though can Sydney keep going up wish I had a crystal ball

Everyone and their dog wants a crystal ball. Unfortunately whilst crystal balls do exist they don't tell the future, they just look shiny on coffee tables.

There is plenty of data around to make informed choices, the key is to learn how to understand the data, and then committing to a pathway that is based on some numbers and some evidence is the best way I know how to move forward. This can include regional, capital city, and "in between" type options as there is a big difference between regional and regional options. Some would consider Wollongong regional, others wouldn't . There is a big diff between a 1 horse mining town and a diverse regional with stable economy.
 
Personally, I'd drop that $700k on a 2 bed apartment in the inner/middle ring if you're set on Sydney. Marrickville/Dulwich Hill are great prospects. Erskinville too, though your money won't go as far there.

You also might consider spots like Glebe, Stanmore, Petersham.
 
You guys need to do the numbers for investment purposes rather than for location because the better areas have hit their peak.

It's cyclical, so it will come around again, and again, and again.

Despite what some hysterics will try and advise you.

Too true. Those that have seen a cycle or two before know even Sydney can have years (and years and years) of little growth in between good runs. Each area will have its time in the sun. Knowing where to buy at what times just improves the short/medium term outcome (improving speed of subsequent purchases). Long term its all going to average out eventually.
 
I started to look around, price seemed to be over my limit. The areas that I can think of are : Toongabie, Black Town, Quakers Hill, Merrylands, Holsworthy, The Ponds, Stanhope Garden(these ones are over my budgets : Kellyville, Castle Hill)

I would personally keep to suburbs next to the train line.

Talking to a local agent (Toongabbie and surrounds) had the view that these areas will be touching a million in the next 3 years. I think land is good - given the proximity to Parramatta; areas like Wentworthville - which is really next door - has had a lot of gentrification, with people of Asian decent buying nicer houses.

I would personally also like to buy a block or two in these areas, leave for a few years to build and sell, or alternatively build and hold - obviously numbers permitting.
 
From what I have heard Sydney and Western Sydney is pretty much at its peak. You may be better investing in regional NSW or heading up to Brisbane which seems pretty popular at the moment. I know a few people who have a heap of units and they seem to be doing very well out of them even with all the strata fees etc.

Looking at the Ponds around Christmas time its amazing how much that place has grown my last visit was back in 2008. I definatly wish I had money to buy land out there back then as the prices of land have just taken off its pretty ridiculous.

Im currently looking to invest in regional NSW mainly because my budget is around 200K. Who knows though can Sydney keep going up wish I had a crystal ball

Agree with your view on the Ponds :) I wish I had the capital to go in at 2008, I was far too young and foolish back then.

Speaking of Brisbane, it is completely an uncharted lands for me since I seldom go there. Any hints on which area that people start to look at these days? Units or Land type properties?
 
I would personally keep to suburbs next to the train line.

Talking to a local agent (Toongabbie and surrounds) had the view that these areas will be touching a million in the next 3 years. I think land is good - given the proximity to Parramatta; areas like Wentworthville - which is really next door - has had a lot of gentrification, with people of Asian decent buying nicer houses.

I would personally also like to buy a block or two in these areas, leave for a few years to build and sell, or alternatively build and hold - obviously numbers permitting.

Thanks Monalisa, will definitely do my research and make sure the numbers add up.

Is it normal for the land type property to have lower rental yield compared to unit/apartment? This seems to be the case from my research..
 
Speaking of Brisbane, it is completely an uncharted lands for me since I seldom go there. Any hints on which area that people start to look at these days? Units or Land type properties?

Depends on your strategy, and what you are comfortable with / able to afford in terms of negative gearing.

Higher yields around Logan.
 
Is it normal for the land type property to have lower rental yield compared to unit/apartment? This seems to be the case from my research..

Definitely in Sydney it's normal. These are going to be (if not already) the blue chip areas due to the proximity to Parramatta. A $600k-700k purchase may only rent for $450 per week (depending on the property of course, but you get my drift). The upside is the future capital growth that is being counted on.

MsAli
 
Agree with your view on the Ponds :) I wish I had the capital to go in at 2008, I was far too young and foolish back then.

Speaking of Brisbane, it is completely an uncharted lands for me since I seldom go there. Any hints on which area that people start to look at these days? Units or Land type properties?

I remember going along windsor road when I was a child back in the 80's early 90's and kellyville the ponds etc was just a dingy little area of farmland with shacks where nobody had any real interest of living. Those people that owned all that land and dingy little shacks must be really laughing now and living the good life..... Its amazing watching that area change over the past 25 years have to admit though blacktown council did a pretty good job at developing the whole area and upgrading the infrastructure everything just seemed to fall into place.
 
I remember going along windsor road when I was a child back in the 80's early 90's and kellyville the ponds etc was just a dingy little area of farmland with shacks where nobody had any real interest of living. Those people that owned all that land and dingy little shacks must be really laughing now and living the good life..... Its amazing watching that area change over the past 25 years have to admit though blacktown council did a pretty good job at developing the whole area and upgrading the infrastructure everything just seemed to fall into place.

One of our family friends was telling us they know someone who moved to Sydney in the 70s, and bought 8 acres in Keyllyville back in the 70s or 80s for 89K.... developers were knocking on their door for a long time, and they were the last one's to sell off their block(s) - sold out by mid 2000s - apparently now they live in a 3 acre property in one of those areas near Annangrove and are pretty well settled.
 
The upside is the future capital growth that is being counted on.

MsAli

That is right so if you are losing 100-300pw in cash flow and the cycle stops then you are not going to be happy. You had better be sure that upside is there if you are going to take that path.
 
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