Sydney City apartment vs inner city terrace

[SmiTTy2008]

Hi Guys

Long time reader, first time poster - just like to start off by saying i totally love this forum!

Would like to get peoples opinion on Sydney City apartments vs inner city terraces (eg. erskineville, chippendale, darlington) .

From what i've observed, Sydney city apartments seem to experience fairly good rental returns (Although the down side is the high quarterly strata fees etc.). As the apartments are in the city, they also seem to be fairly stable.

terraces on the other hand seem to also get decent rental but does not appear to be as strong as city apartments (happy to be corrected), but most of them are also very very old.

For someone looking for long term investment , I'd be interested in get other peoples opinion/input.

Thanks in advanced.

 

[Rolf Latham]

Land content

In most cases go the 9 ft terrace

ta
rolf

 

[Peter 14.7]

Hello SmiTTy2008

I have lived in and invested in both in the surburbs you mention.

Is it for IP or PPOR or both with a mix?

Peter 14.7

 

[SmiTTy2008]

Hello SmiTTy2008

I have lived in and invested in both in the surburbs you mention.

Is it for IP or PPOR or both with a mix?

Peter 14.7

Hi Peter 14.7 , It will be purely for IP purposes only.

 

[Peter 14.7]

Overall Terraces are better investment if:

1. you can afford them as they cost more than apartments
2. you can accept lack of parking
3. you can accept they may need reno
4. you can accept tenants in terraces dont want crap
5. beware termites

Essentially Terraces attract the FHO where Apartments are a bit like cars. A new model(block) is never too far away.

No BC fees but no pool or carpark.

A crap terrace, dark, old, wet noisy etc will not beat a good apartment.

Location and quality matters more than type IMO.

Peter

 

[Propertunity]

Overall Terraces are better investment if:

1. you can afford them as they cost more than apartments
2. you can accept lack of parking
3. you can accept they may need reno
4. you can accept tenants in tenats dont want crap
5. beware termites

Essentially Terraces attract the FHO where Apartments are a bit like cars. A new model(block) is never too far away.

No BC fees but no pool or carpark.

A crap terrace, dark, old, wet noisy etc will not beat a good apartment.

Location and quality matters more than type IMO.

Peter

Yep, what Peter said.....and erskineville has performed exceptionally well with a long term trend of over 9% CG and 13% for 2008! (source APM)

 

[Peter 14.7]

Location matters as well.

Some inner CBD suburbs are more terrace attractive like Newtown, Erskinville, Surry Hills. Where others have mostly apartments like Chippendale, Ultimo, Moore Park.

This matters as a terrace block on it own, surrounded by apartments, is not as attractive as one in a leafy street. Feels more like an apartment. Trees matter. Good cafes matter. Street Life matters.

Peter

 

[Croc Dundee]

I;d rather live in the Apartment - then you dont need a car - how about ssomething like Broughton House in the CBD - an older style one with more character and lower strata

 

[contrary]

Chippendale and redfern are mostly terraces. Still waiting for gentrification. Redfern I actually like as a potential investment. Somewhere near the station with offstreet lane parking. Yes, I know the local residents, but that's what the gentrification gamble is about.

No rush though in this environment. Appartments, near the beach or harbour I could understand but in Ultimo does not get me very excited. Camperdown and glebe have had a dash so you maybe a bit late there.

 

[Ajax]

I think inner Sydney terraces are a better investment than units. Capital gains on inner city terraces are very strong and consistent.

Have owned a terrace in Redfern since 1993.

These issues come up with terraces (most mentioned by Peter):-

Termites (had a termite exterminator tell me pretty much every terrace in my street would have had or currently had a termite problem)

Maintenance (for a 100 year old terrace this can add up)

Parking (however should receive on street parking sticker from council, with tenants some may not drive). Offstreet parking via rear lane access will add tens of thousands to a properties value. Downside with rear lane is easier access for break-ins.

Street noise (if near a pub or on a busy street)

Strange sewerage and stormwater drainage plans that may include neighbours property.

Good demand by tenants who may share a terrace/let by the room. Wear and tear on the terrace may be higher than normal as each tenant tries to cram their things into their own bedroom.

At the end of the day a unit block just gets older. A piece of dirt is timeless.

 

[ok180]

ok i'll bit. I have owned a terrace in Alexandria for the past 2 years. Never owned an inner city apartment. Generally apartments in the city have very high strata. IF you must buy one go for a small block or a townhouse.

I picked up a 1 bedroom terrace in Alexandria for 425k. It's really a 2 bedroom but it had a wall knocked out to make a bigger living area. The building itself is about 60m2 the block is 120m2. Could i live in it? NO WAY, too small for me i live in south west Sydney in a Mcmansion but these little terraces have always been in demand. so far i am on my second set of tenants and i get $420 a week rent, if i sold it now i would probably get about 500k.

Try to get a place that is tidy. Forget structurally sound you wont find it. They all have evidence of termite damage or have had illegal renovations or have been built to suspect building tolerances. Usually something that's tidy isn't about to fall down though so that's what your after and probably as good as you can expect for an IP terrace. Maintenance hasn't been an issue for me because really there is nothing complicated to maintain, theyre very basic buildings. So far all i have had to replace is a stove element. It's by far my least maintenance intensive IP. You shoud go for a smaller terrace because it will discourage people from sharing and also the smaller it is the less time they're likely to spend in it, less chance of people having parties and damaging things.

For areas i would look at:

Newtown/Erskineville - Popular and hard to pick up a bargain, probably are not going to gain much the next few years.

Redfern - Very good buying here try to avoid the block though, no matter how many times they say they will fix it's still a while off. Big suburb, plenty of good pockets around.

Chippendale - Still a bit of a dodgy area but if one suburb is going to see good capital gains it's this one once the new shopping area goes in, although keep in mind when the Broadway shops were revamped 15 years ago not much changed so it's still a gamble.

Alexandria - Stay away from the idustrial area obviously but the if you buy near the park or in the golden triangle your on to a good thing. No aircraft noise there either unlike many near by suburbs.

Surry Hills/Darlinghurst - Great place to buy but pricey. Harder to get tenants who are long term due to the party atmosphere of these suburbs.