Sydney - InnerWest/North Sydney IP to be eventually PPOR

Hi guys, I'm 23, living at home, have my first full time job out of uni earning ~55k with the potential to be 65-70k wage easily within the next 2 years (working in CBD)

I have saved about 60k as a deposit and am looking at a budget around 550-600k likely 1 bed apartment preferably North Sydney/Neutral Bay or Enmore/Stanmore/If-I'm-lucky Newtown. Ideally renting as close to as 500/w as possible.

Because I'm looking to possibly live in it within 2-3 years, I'm wondering, one, is this a good idea? A lot of my finance friends are saying buy a 2 bed unit around Parramatta, ideally with some land and just rent in say North Sydney when you want to move out. Two, a it may become PPOR would it be wise to split the loan say 30% P&I and 70% IO? (So that the equity build up and be used for another IP when I move in)

Basically, if this isn't the best strategy.. what should I be doing property wise with my current situation, for the most bang for buck with this 60k and my low overheads/good cash flow at the moment.
 
Hi guys, I'm 23, living at home, have my first full time job out of uni earning ~55k with the potential to be 65-70k wage easily within the next 2 years (working in CBD)

I have saved about 60k as a deposit and am looking at a budget around 550-600k likely 1 bed apartment preferably North Sydney/Neutral Bay or Enmore/Stanmore/If-I'm-lucky Newtown. Ideally renting as close to as 500/w as possible.

Because I'm looking to possibly live in it within 2-3 years, I'm wondering, one, is this a good idea? A lot of my finance friends are saying buy a 2 bed unit around Parramatta, ideally with some land and just rent in say North Sydney when you want to move out. Two, a it may become PPOR would it be wise to split the loan say 30% P&I and 70% IO? (So that the equity build up and be used for another IP when I move in)

Basically, if this isn't the best strategy.. what should I be doing property wise with my current situation, for the most bang for buck with this 60k and my low overheads/good cash flow at the moment.

At the stage Sydney property cycle is at, I would be looking elsewhere in Australia - there are numerous threads on this. If I were you, I would make money elsewhere, and then buy in Sydney when the market stabilises. Don't have a crystal ball on how long this buying frenzy will last - but I wouldn't want to be competing with other buyers in Sydney.

Be careful with Parramatta, as there could potentially be an oversupply.

MsAli and I started looking at buying at 23 - but this was in Sydney - looking back - that was the bottom of the cycle!

You have plenty of time. In my view, buying elsewhere in a rising market will give you a better deposit to come back to Sydney in a few years.
 
At the stage Sydney property cycle is at, I would be looking elsewhere in Australia.

You have plenty of time. In my view, buying elsewhere in a rising market will give you a better deposit to come back to Sydney in a few years.


Thanks, Monalisa. This was a concern of mine, the only reason I am so biased towards Sydney is FOMO and knowing I have a place I could move into that's close to work. I can't believe for a little more (600-650k) you can buy a small house in Footscray, Melb. Syd is crazy, everyone on the ground is in a frenzy as well. It's hard not to get caught up in it.

Edit: My problem with other capital cities is getting the time to go down and look around. Apart from around Melb CBD, I don't know other places very well.
 
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Thanks, Monalisa. This was a concern of mine, the only reason I am so biased towards Sydney is FOMO and knowing I have a place I could move into that's close to work. I can't believe for a little more (600-650k) you can buy a small house in Footscray, Melb. Syd is crazy, everyone on the ground is in a frenzy as well. It's hard not to get caught up in it.

Edit: My problem with other capital cities is getting the time to go down and look around. Apart from around Melb CBD, I don't know other places very well.

Pingu, I suggest you talk to other investors who have bought in other areas. I know other investors fly up to places on a Saturday to purchase properties - it is time consuming and tiring for sure. But in initial stages of your investing career, you will have to invest that time, and it will pay off over time.

I know being in Sydney, it is within your comfort zone; and I would feel the same.

Don't get caught up in FOMO - as I said, you have plenty of time to make money - not worth buying in a place which has already risen significantly, and sit on that property for 10 years to see some capital growth.
 
Pingu, I suggest you talk to other investors who have bought in other areas. I know being in Sydney, it is within your comfort zone; and I would feel the same.

Pingu, talk to Michael X on the forums who bought 10+ in Brisbane and he lives in Sydney. Michael is also an up and coming mortgage broker. You want someone whose been there done that so you can model on what they've done.

Further build a team - broker, solicitor, accountant etc. Make sure your broker is good first and foremost.
 
Hi pingu,

I think it will be very hard to get 1 bedders for 550-600k these days in the suburb you listed ( inner west, glebe, lower north shore). You need to have budget over 600k.

+ with 55-60k deposit you will be leveraging too much. you'll need 10% deposit 60k + stamp duty ( 20-25k) + lmi + legal fees + strata , building inspection and pest inspection (2+3k), that around 90k .
 
Thanks guys, I will see if I can get into contact with Michael for a bit of help. It looks like I may be following the same approach and I definitely want to get it right. Gah, its just frustrating watching everyone else step in and not really knowing what to do.
 
Thanks guys, I will see if I can get into contact with Michael for a bit of help. It looks like I may be following the same approach and I definitely want to get it right. Gah, its just frustrating watching everyone else step in and not really knowing what to do.

You've come to the right place Pingu. The learning curve is steep but trust me, it will pay off. You can do it. Good on you for taking the first step.
 
Thanks guys, I will see if I can get into contact with Michael for a bit of help. It looks like I may be following the same approach and I definitely want to get it right. Gah, its just frustrating watching everyone else step in and not really knowing what to do.

Well done for getting to the stage of thinking about your own property.

MsAli and I constantly did 'numbers' / calculations on properties to determine how much the weekly, monthly and weekly cash outflow / inflow. I would suggest you putting together a spreadsheet and doing numbers on properties you are considering.

It is only the beginning... with time it will start making more sense.

You should come to the Sydney meet up on 20th May - see the meet up section.

Good luck!!
 
At the stage Sydney property cycle is at, I would be looking elsewhere in Australia - there are numerous threads on this. If I were you, I would make money elsewhere, and then buy in Sydney when the market stabilises. Don't have a crystal ball on how long this buying frenzy will last - but I wouldn't want to be competing with other buyers in Sydney.

Be careful with Parramatta, as there could potentially be an oversupply.

MsAli and I started looking at buying at 23 - but this was in Sydney - looking back - that was the bottom of the cycle!

You have plenty of time. In my view, buying elsewhere in a rising market will give you a better deposit to come back to Sydney in a few years.

OK, so in this case what about the Fortitude Valley in Brisbane ?
is that a good place to invest now ?
 
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