Parramatta, your thoughts

[bronze]

Guys,

I have been looking at Parramatta and have located a unit, reno'd in a small block of units, 2 bed, 1 bath, carport that is currently renting at 240pw and i could pick it up for 200k.

Is anyone currently buying or has recently bought in Parra,

this unti is well located to the main shopping strip,

what are your thoughts re capital growth.

personally, I don't think you could lose on a place this close to sydney for that price on a 6% yield.

Your thoughts

 

[Jontxu]

Middle of Sydney

Hi there, Parramatta does have all the fundamentals in place, here are some stats for you:

Median: $300K
12 month median growth: 0.3%
10 year avg growth: 7.3%
Median rent: $280p.w.
Gross rental yield: 4.9%

Source: Australian Property Monitors.

The short term growth has been slow, however healthy long term growth over the last 10 years, considering we are talking about units.

Me thinks, Parramatta will always be a good performer, it is right in the middle of Sydney (geographically) and a lot of companies, including government have moved their headquarters there.

Do some further research into the strata, the management, etc. Also get the agent to give you ACTUAL sales from the same building or similar ones, last 3 months. Get them to work hard.

There are a lot of units available in the area, so make sure your prospective purchase has got some “edge” (location, security, style, views, etc, etc)

Finally, make sure you negotiate hard the purchase price, try to get some equity when you buy it.

Happy Investing
Jon Salvador
www.headinghome.com.au
For investors … from investors

 

[bronze]

Thanks for your reply,

will be crunching hard on price,

buying below median with above median rental so hopefully will be a good deal

 

[dajackal]

hi bronze,

have been eyeing parramatta for my next ip purchase...
considering you mentioned that it's in a good location, how did you manage to find a place so low below the median?

thanks!

j

 

[bronze]

A bit of luck, a cold market, and a agent who isnt really interested

 

[tonyc00]

Hi bronze

I have several units (8) in Parramatta and I think the area has potential.

The yields of my properties were about 5% and there have been no issues with finding tenants.

I would proceed with the purchase but be careful that the unit is in Parra and not, say Granville or Harris park where the property tends to be cheaper than Parra.

My last purchase (May 2007) was in Parkes St at $200k.

Regards

Tony

 

[bronze]

Thanks mate,

Has there been upwards pressure on your rents, and do you think the rents will rise much in the next year.

cheers

 

[tonyc00]

Hi

Bronze, in response to your question, rents are good

except the tenants are staying (which is good but equally if they were to move out then I would not complain since it would give me an opportunity of raising the rent/s significantly).

For example, the unit at Marsden St - rent was $285pw the tenant vacates at the end of the month but already I have a prospective tenant at $310pw.

Regards

Tony

 

[bronze]

Great stuff tony,

It would appear as though it is one of the few places close to a cap city where you can have growth property at minimal holding costs

 

[Ahmad Azimi]

Sounds like a good buy. Go for it. Recently bought one OTP there. Great potential for Parra. They are spending atleast 1.4billion on redevelopment etc. Dont think you can go wrong there.

Lets us know how you go.

 

[tropic]

Hi bronze

I have several units (8) in Parramatta and I think the area has potential.

The yields of my properties were about 5% and there have been no issues with finding tenants.

I would proceed with the purchase but be careful that the unit is in Parra and not, say Granville or Harris park where the property tends to be cheaper than Parra.

My last purchase (May 2007) was in Parkes St at $200k.

Regards

Tony

Tony,

Which section of Parra do you consider as more desirable?
Is the market still flat now hence room for negotiation?

 

[Player]

Hi all,

Have to agree that fundamentals in Parramatta are good. The government (local and state) and private interests have some 2 billion dollars investing there. Consider the amenity of the suburb. It is an employment node, transport hub and the gateway to Sydney's west (where 10 % of Australia's populace live), and Parramatta is approx 20 km from Sydney CBD

I purchased a "four-pack" last year on an initial yield of 5.8 % and they were under-let. Since that time my units are returning a gross yield of over 6 %. I think you would be hard pressed to achieve this return with commercial property in a metropolitan area, let alone with residential investment property in the nation's largest city. Couple this yield with considerable depreciation (previous owner renovated all units) and some building write off remaining, and my out of pocket costs are very small compared to my investment holding.

At the time I purchsed Sydney property was on the nose and it appears sentiment is still quite negative except for blue ribbon locations. However, with affordable properties in Parramatta, you will always have tenants willing to pay median priced rents and in case of a liquidation being necessary, the masses can afford to buy. Not as sexy as the eastern suburbs, but Parramatta is within the price range of many more customers. Better to be a small fish in a big pond than a big fish in a small pond.

I agree with Tony's post earlier that ensure you are buying in Parramatta (or North Parramatta) and not Granville or Harris Park. There may eventually be more upside potential in the latter suburbs as they are more the ugly ducklings although with this market, that may take time. Your tenants are also likely to be of a higher calibre outside these areas at present. Less risk in Parramatta itself.

 

[zizou]

Yes!!! Parramatta will boom!!!! I recently invested in Hassel st and this will make me lots of money

 

[alexlee]

zizou, I'd be interested to hear a bit about yourself. When you bought your first property, where, how they've performed, etc.
Alex

 

[zizou]

Alex,
I started property investing about 15 years ago and now you can call me a full time investor. I bought my first property in Marrickville, it was a house, back then I just wanted to find a place to live. About 5 years after that, a friend introduced me to property investing and showed me how I can take advantage of the the equity gained and used it to invest in other properties. Most of my properties now are neutral or positive gearing, so I can say that I'm very confident with my decisions...

I spread my seeds around, I have properties in melbourne and queensland. Recently, the Sydney market have been very steady.....only this year I started to see opportunities and I'm very excited about it, especially Parramatta. What else you want to know Alex? I would love to share my experience with people who are keen!!

 

[evand]

I'd be interested to know why you think Parra's a good investment area. I know the area very well and was back there a couple of weeks ago.I don't think its a great investment area.

It looked quite run down compared to 5-10 years ago. Beside the North Church St restaurant area, that looked ok.

I know about the government spending and the infrastructure improvement (train station) etc but i dont think they are the only things that make an area good to invest in.

 

[giraffez]

There are a lot of apartments selling on Hassall Street Parramatta. Is this a good investment? I think they are built by skyton.

There are also some on cowper st.