Postive Gear Sydney properties

From: Mark Portelli

Hi. Ive been reading this forum for quite a while and have certainly learned a lot. First time posting and would like some opinion.
We currently have two IPs,townhouses 5ks from bris CBD, originally purchased via Inv. Club. Bought 2 years ago with a 106% loan for both.Borrowed 365K and they are currently "worth" about 390-400K for both ( these are local RE appraisals so I conservatively say they are worth at least the total paid - 106% With all outgoings they cost us 57/wk to keep.
Our home is worth 450K with a LOC of 65K.Its acreage and are building a home on it hence LOC. Once completed the property will be worth 650K+
Against what we have we can borrow 400k to purchase more IPs. with experience we want +ve cashflow prop. and preferably in Sydney.
There lies the problem. Can buy in the outer west ie Blacktown/Quakers Hill/Penrith etc but not +ve gear - houses seem to be selling quicker than hotcakes!
One idea Ive got (and I know its not new) is to purchase land and build duplex sell one off keep the other to achieve lower than wholesale price and hopefully +ve cashflow from the remaining prop.
Problem is financing - I dont think 400K is enough. the other option is to arrange for 2 or 3 other players to duplicate the idea over and over or find someone like Micheal Yardney in Sydney.
Any thoughts?

Mark P
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Reply: 1
From: Hans Jakobi

Positive geared properties can be found in the outer areas of Sydney however it's a question of timing. At the moment the market is hot so it is much harder to achieve the positive cash flows when vendors are less negotiable. This will not always be the case.

If you have more lower priced properties, you will spread your risks and increase your cash flows.

Hans Jakobi
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Reply: 2
From: Michael G

Hi Mark,

I bought in Quaker's Hill in '98 and I lived in Cranebrook for about 10 years (north of Penrith).

Unfortunately Blacktown City council banned subdivision on land for duplexes in March '98. Which stopped that little niche. Same as the Hills District (both growth areas).

One possible idea I've been toying with is relocating a house onto a vacant block. Or possibly moving a second house onto an already occupied block.

Someone else mention looking out for granny flats, or even possibly putting in a granny flat to create a 2nd income. Maybe this would work well with a large block with 2 street fronts or something?

I bought my QH townhouse in for $167k rented at $230/wk, its now revalued at $230k. This of course reduces the yield dramatically if one was to buy in this area now. I think rents would only have gone up maybe $5-10/wk

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Reply: 2.1
From: Mark Portelli

Thanks for the replies Hans, Micheal.
I coming to the realisation that its hard to find either positive or neutral geared properties in the Sydney suburbs and if they exixt, there are plenty of people after them.
I'm coming to the conclusion it may be best to stick with the outlying suburb with future potential as we are in it for the long haul but obviously would like IPs that will care for themselves moneywise.
And the more the merrier so as per reply spread the risk.
i think of Balmain many moons ago and everyone was trying to get out of the suburbdue to its rough past now its verrrry different!
I also want to do some homework on the viability of going developer and looking at duplexs ormultriple residences.
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