Penthouse option?

[aal04]

I want to upgrade to a bigger home to start a family. I live in a unit in Strathfield/Burwood atm and love it.

stuff:
- 33 yr old. Nearly paid off my unit (~500k). Both wife and I work full time
- budget probably 600k-1000k (want to keep my current unit as IP)
- 3+ bedroom. Starting family.
- 5min safe walk to station
- station within 20min of city (strathfield-burwood-ashfield)
- Need entertainment area/bbq area.
- I value lifestyle investment as much as financial investment.

Townhouse/duplex would be ideal, but there hasnt been any decent ones for sale in the last 4-5years. So im thinking of buying a penthouse.

What ive gathered from penthouses..

Cons
- High strata
- Accessibility. Would feel like a chore going out.
- Moving furniture can be a pain.

Pros
- Close to station
- Quiet (compared to unit/townhouse/duplex)
- Larger internal area, usually with outside entertainment area
- safe

Ive noticed ALOT of penthouses for sale. So is there something im missing here. Are they not very well sought after? What are big things should i consider?

Thanks

 

[neK]

Have you considered Croydon?

A house sold on the weekend for $950k (off Queen St).

Probably a 12min walk to Croydon (all stations) or 16m walk to Burwood station.

12min walk isnt too bad compared to the 6m walk... bit annoying at times. But still better than living in a unit

 

[cimbom]

I've noticed that a lot of what is advertised in Australia as a "penthouse" doesn't match with what most people perceive them to be - they are simply slightly bigger apartments on the top floor. In most major cities around the world, a "penthouse" is massive, has significantly better fixtures and fittings than "standard" apartments and they have other additional perks on top of this as well. These are very rare in Australia and the ones that exist cost substantially more than $1 million.

 

[esh]

Inner West Sydney

Have look at this,

http://www.domain.com.au/Property/For-Sale/Apartment-Unit-Flat/NSW/Camperdown/?adid=2010271795&topspot=1


http://www.domain.com.au/Property/For-Sale/House/NSW/Annandale/?adid=2010288986



Check these two out, just did a quick search. One in Camperdown, one in Annandale. I do work in a Real Estate agency but not the ones I have posted here so just pointing out I am not trying to sell!


They'r closer to city aswell. Also moving is always a pain- I dont think this should hold you back. Good capital growth in these areas

 

[neK]

i must say, i quite like the one in 37A Breillat Lane Annandale. Location is pretty good!
I'd take that over a "penthouse" in strathfield anyday.

 

[esh]

i must say, i quite like the one in 37A Breillat Lane Annandale. Location is pretty good!
I'd take that over a "penthouse" in strathfield anyday.

better location too, 10mins from city (driving)

 

[aal04]

Have you considered Croydon?

A house sold on the weekend for $950k (off Queen St).

Probably a 12min walk to Croydon (all stations) or 16m walk to Burwood station.

12min walk isnt too bad compared to the 6m walk... bit annoying at times. But still better than living in a unit

I have friends that live in Croydon. Its like a ghost town, and having a brothel so close to the center severely drags down the suburb imo.

 

[aal04]

Check these two out, just did a quick search. One in Camperdown, one in Annandale. I do work in a Real Estate agency but not the ones I have posted here so just pointing out I am not trying to sell!

Thanks. Its interesting to see some decently priced places so close to the city. Obviously pretty small at 160m (im currently at 125m for my 2 bedder), but its under 1000k for a free standing. And its very contemporary! Good find!

I like Strathfield because i have Woolies 3min away, and the station 5min away. Plus i work in Ryde, so its a 15min drive north for me, and a 15 min train ride east to central for my wife. And friends and family are south in St George.

Regardless, does anyone have an opinion on Penthouses?

 

[cimbom]

I think a penthouse is a decent purchase/investment but only if it's an actual penthouse and not an overpriced apartment on the "penthouse floor" which many are. If you've found some that you like, put up some links and people will give you their opinion.

 

[neK]

Generally speaking, im not a fan of the "penthouses" you mentioned as they are usually units with an oversized balcony or roof access in high rise apartment blocks.

I have no issue in living in one, i just wouldnt want to own one due to strata costs. I would much rather settle for a townhouse where the strata is lower.

 

[neK]

http://www.onthehouse.com.au/reports/property_profile/13438140/1_Norwood_Street_BURWOOD_NSW_2134/

This one was sold for $1m in Nov 2012.

And the land size is probably around 350sqm, not the 154sqm it shows... if it was, it wouldnt fit the house.

 

[Brady]

I want to upgrade to a bigger home to start a family. I live in a unit in Strathfield/Burwood atm and love it.

stuff:
- 33 yr old. Nearly paid off my unit (~500k). Both wife and I work full time
- budget probably 600k-1000k (want to keep my current unit as IP)
- 3+ bedroom. Starting family.
- 5min safe walk to station
- station within 20min of city (strathfield-burwood-ashfield)
- Need entertainment area/bbq area.
- I value lifestyle investment as much as financial investment.

Townhouse/duplex would be ideal, but there hasnt been any decent ones for sale in the last 4-5years. So im thinking of buying a penthouse.

What ive gathered from penthouses..

Cons
- High strata
- Accessibility. Would feel like a chore going out.
- Moving furniture can be a pain.

Pros
- Close to station
- Quiet (compared to unit/townhouse/duplex)
- Larger internal area, usually with outside entertainment area
- safe

Ive noticed ALOT of penthouses for sale. So is there something im missing here. Are they not very well sought after? What are big things should i consider?

Thanks

What your reasons behind keeping the current unit? Do you plan to move back into at some stage? Do you believe it to be a strong investment (usually PPOR are purchased for different reasons to IP, more emotional purchases)

When you say you have nearly paid off your unit, do you mean actually reduced the balance or offset account?

If you have reduced the balance, you wont have any tax deductions from the interest.

A possible solution could be to sell the unit, CGT free as PPOR.

Use funds to buy new PPOR with small mortgage, then purchase a different IP that is purchase for the sole purpose of IP (hopefully with better growth prospects then the original PPOR) thus allowing you to have deductions.

Guessing from your borrowing capacity that you earn decent income between the two of you.

In future I would suggest putting all funds into an offset account rather then reducing the principal, if you have already done this, please forget the above and gerat work

 

[vmclee]

Penthouses generally have the most water issues/seepage due to the rain landing directly on the balconies/tiled terraced areas.

You'll also need to check whether if there are any exhaust pipes from the building pop out near/on your plan, as well as if tradespeople need to frequently access your area to in order to access the water heaters/tanks and/or air conditioners for the building.

 

[devank]

Penthouse without a view is kind of pointless to me. Recently asked my wife where she would like to live after kids finish their uni. She said a penthouses with access to kids and our social life. So I looked at penthouses and I think Concord was my pick at that time as you can see water and lights.
Oh... the reason we didn't buy because we were 1 mil short

 

[aal04]

What your reasons behind keeping the current unit? Do you plan to move back into at some stage? Do you believe it to be a strong investment (usually PPOR are purchased for different reasons to IP, more emotional purchases)

Its a very low density unit in my opinion one of the best spots in Strathfield. I saw a unit go for 50k+ above expectations a few months ago. I think its going to be a good investment (subjective). I dont plan to move back there because it will be too small for a growing family with kids.

When you say you have nearly paid off your unit, do you mean actually reduced the balance or offset account?

With my current additional repayments, i can have it paid off within 12 months. All of it is in the offset account and im about 25 years ahead of schedule (i lived with parents until i was 30). its my only property. I would like a nice PPOR and hence why i havent gone crazy with IP as id like the offset account accessible for this expected upgrade. Im rushing it a bit faster now because i want to see what situation ill be in after the PPOR upgrade so i can see what i can do with IP.

atm I plan to use the current unit as equity for my new main residence. and borrow big off it for tax offset whilst trying to attack my PPOR mortgage. (that the right thing to do?)

Use funds to buy new PPOR with small mortgage, then purchase a different IP that is purchase for the sole purpose of IP (hopefully with better growth prospects then the original PPOR) thus allowing you to have deductions.

Thats the million dollar question. Is it or isnt it going to increase relatively? Im not a fortune teller so its a gamble like many things in life. But I think strathfield is possibly one of the best suburbs in Australia. I can only see traffic getting worse and worse, so a station thats 15 minutes to the city with great schools + amenities should be valuable. The negative is some high density units are being built north of the station, but what i like about my current unit is its low density next to schools on the far better southern side.

One thing i know is a poor financial decision but what im willing to sacrifice is the additional strata if i choose to go penthouse as i believe in lifestyle investments just as much as financial. My wife and I are talking atm, but i think 1500-1700p/q is probably where we think is the max for strata we are willing to sacrifice. Of course we definitely want value for that strata!

 

[devank]

Most of these schools you are talking about are 'private' which costs about 25k per year. Being next to a good public school is far far better than being next to a good private school.

 

[cimbom]

I sort of disagree. Housing next to good public schools tend to be inflated in value because people think it makes more sense to spend money on a house and pay less fees rather just paying for expensive school fees. I think in the end, they work out very similar. I've seen some good "public" schools that have very high costs so it's not like it's free school vs 25k/year school.

 

[mumbai]

I sort of disagree. Housing next to good public schools tend to be inflated in value because people think it makes more sense to spend money on a house and pay less fees rather just paying for expensive school fees. I think in the end, they work out very similar. I've seen some good "public" schools that have very high costs so it's not like it's free school vs 25k/year school.

what would be those 'high costs' and would they not be in the 25k/y school as well? Also, how high the costs would be to justify a 25k/y school?

 

[cimbom]

I'm not saying that one is better than the other - just not to assume that public school = free/very low cost because for many, that is not the case. You would need to decide on a case by case basis.

 

[Lily House]

Hi aal04,

It might just be me, and I admit I do have a fear of heights, but if I had the choice, I wouldn't want to raise children in a penthouse (being top floor of a block of apartments). I'd spend every minute worrying about one of them falling out a window, or dragging a chair over to the edge of the balcony (to climb on), etc.

Just something to consider if you haven't already. Some toddlers/young children have a love of climbing and no fear of the danger they can put themselves in.

Best of luck in your decision making.

Caroline