OTP 2 bed for under 600K in Sydney metro?

Hi all,

My GF is going for her first place and wants to take advantage of the stamp duty exemption and FHOG. To be eligible, she must buy OTP under 600k. The addition to this is that she would like to buy a place that will have good CG in the next 5 - 10 years ahead and it cannot be out in the sticks. I'm thinking anywhere within 30kms to the CDB or within a 30min trip in either car/train. An indicator of too far is out near Penrith or down near Sutherland. That is over a 30 min drive in.

Areas like St Mary's where bikies hang out is also out of the question. I think an area with a mix of two demographics is good to start.

Anyone know of a good area or good OTP selling? 1 bedders are easy to find but not 2 bedders under 600K.
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Even after taking into account the stamp duty exemption and FHOG, I believe OTPs are overpriced.
On top of that you are also looking for a CG in 5-10 years which is a long shot with the OTPs.
With that budget and flexibility with the location, I would go for a established house/unit/townhouse.
 
Even after taking into account the stamp duty exemption and FHOG, I believe OTPs are overpriced.
On top of that you are also looking for a CG in 5-10 years which is a long shot with the OTPs.
With that budget and flexibility with the location, I would go for a established house/unit/townhouse.

Yes I agree that you can be paying a huge premium. Sometimes if could be worth paying an extra 50K for something new as opposed to 10 years old I guess. However, 50k more for a new one is prob like the cheapest unit in the complex. You know when they adverstise OTP starting from 620K. The 620K one is prob ground or first floor facing south with no view.
 
OTP and Capital Growth do not belong in the same sentence.
To chase FHOG and Stamp Duty exemption is a fools errand.

I did it back in 2007. It is still a decision a regret today.

I saved $15k in stamp duty and picked up $7k, so all up benefitted $22k in that transaction.

Opportunity cost was $200k. I think you can tell which option i would have preferred to go with hindsight :)
 
Here's how I look at purchases with grants/concessions...

Take the grant and concessions away, would you still purchase the property? If so then proceed if the sole reason for purchasing the property is to take advantage of grants then you're not buying the property for the right reasons.

Property should stack up on it's own, be it FHOG, Stamp Duty Concessions, NRAS, DFH, Rental Guarantee... without these would you still buy the exact same property.

Property ownership well surpasses any grant, if the property has poor performance the grant will mean very little besides not being as hurt as other who purchase a similar property without the grants.

edit: neK is a perfect example.
 
I regret my OTP purchase too. To make it worse, it was a studio. Very little capital growth in 8 years and increasing strata fees.

Don't do it!
 
Great feedback and thanks.

If this is the case, why do we have so many investors buying OTP. They get sold out during first release and I'm pretty sure that 70% of the buyers are investors. Do we have another mob of investors out in the market with little experience who just buy because they have the cashflow without thinking it through.
 
Great feedback and thanks.

If this is the case, why do we have so many investors buying OTP. They get sold out during first release and I'm pretty sure that 70% of the buyers are investors. Do we have another mob of investors out in the market with little experience who just buy because they have the cashflow without thinking it through.

For the exact reason you tought it was a reasonable idea.

The developers of these OTP has marketing/sales people cold calling many people, they then promote property and talk it up, lots of data and modelling on capital growth with expected rental income. Followed up with glossy pictures. All for $50p/w etc out of pocket.... but thats on expected rent which might turn out to be >$100p/w costs as rents not as high, they you have vacancies coupled with increasing statra/repairs. And on top little to no capital growth and in cases capital loss.
 
Great feedback and thanks.

If this is the case, why do we have so many investors buying OTP. They get sold out during first release and I'm pretty sure that 70% of the buyers are investors. Do we have another mob of investors out in the market with little experience who just buy because they have the cashflow without thinking it through.

What I have come to realise is that you want to add value to your investment purchases. How much value can you add to OTP deals? Zilch, it's all been done for you.

You are purely riding the market, hoping it will increase and in most cases, OTP are overpriced that it will take years to recover the capital growth.
 
Personally as an investor im not a big fan of OTP...

But for a 2 bedder under $600k; some of the OTP in Fairfield ( More like under $500k) is decent value for what you get + the area has good rental yield and has experienced some great CG in the last 2 years.

Else Toongabbie is also a hot area for that sort of price.
 
Great feedback and thanks.

If this is the case, why do we have so many investors buying OTP. They get sold out during first release and I'm pretty sure that 70% of the buyers are investors. Do we have another mob of investors out in the market with little experience who just buy because they have the cashflow without thinking it through.

1. Cash up investors
2. Investors who focus on negative gearing and depreciation only ( Ie high income ...tax etc..)
3. Overseas investors.
4. Inexperienced and no planning

I wont say OTP is the "wrong type of investment" as you can see it clearly does work for some...it just comes down to what you want from that property and if your willing to take that risk.

if your buying OTP just for the grants as one of the reasons...than GG :(
 
I thought OTP, in some cases, was for young inexperienced people wanting to buy a 'cheap' place before they actually go on the market.

Ie: my girlfriend lol
 
For the exact reason you tought it was a reasonable idea.

The developers of these OTP has marketing/sales people cold calling many people, they then promote property and talk it up, lots of data and modelling on capital growth with expected rental income. Followed up with glossy pictures. All for $50p/w etc out of pocket.... but thats on expected rent which might turn out to be >$100p/w costs as rents not as high, they you have vacancies coupled with increasing statra/repairs. And on top little to no capital growth and in cases capital loss.

I also hate how they quote rental return rates at xx% when they do not take into account ANY of the expenses relates to the property. They prob do not mention how quickly strata will go up after a few years when builders insurance expires and the lift breaks down every 5 mins and the pool needs re-tiling.
Oh well - buyer beware I guess
 
I was once told me the sales person - to keep strata down, you should get on the executive committee and not allow them to increase the building's insured value.

(This was after i made a comment about how inadequate their super low strata $300 admin and $10 pq sinking fund was).

This was a for a building with underground car park, mixed residential/commercial and several lifts.

Last i checked the strata (admin+sinking) was up to 1200 pq :) - that was about 2 years after completion.
 
1 bedders in Earlwood may suit your criteria. There isn't much unit stock in the area, and some are larger than most 1 bedders- 66sqm internal plus 14sqm balcony plus carspace, so are unique in the area which is good for cap gain potential. The area is gentrifying with trendy cafes etc, so may be worth looking into.
48 apartments in thecomplex, one elevator, no pool or gym and a good buildr, so strata should be ok.
 
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Anything with an elevator and underground parking means expensive strata.

Stairs and ground level parking are the best :)

And $599 for a 1 bedder (granted they are 60sqm+) is bloody expensive! I would be aiming for an older 2 bedder of 72sqm instead. Better crossflow ventilation and better built IMO.
 
Anything with an elevator and underground parking means expensive strata.

Stairs and ground level parking are the best :)

And $599 for a 1 bedder (granted they are 60sqm+) is bloody expensive! I would be aiming for an older 2 bedder of 72sqm instead. Better crossflow ventilation and better built IMO.

What Beau failed to say was that he is a RE Agent who works for R & W.
 
That's just poor form from Beau.

My picture, name and phone number was in the link I posted. It should be clear that I am an agent, I have made no attempt to deny the fact.

Just as jacqiie, nathan and propertinity do not hide the fact that they are buyers agent.
No poor form here.
 
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