Taking the plunge - Our first investment

[Rbellaj]

Hi guys

What a great forum, I stumbled upon it while doing my initial research into our first IP. Any advice you all have would be great.

So we are a couple in our early 30s with one bub, own our townhouse in randwick (well the bank does) and we have just organised to use some of equity to play with. We have $400k to play with but hoping to only spend $350k. We are doing this so one day we might have a chance of buying a house in Randwick or Maroubra!

SO, what and where to buy?

Initially I thought a 2 bedroom unit blacktown area, but our broker says 1 bedders are a safer bet. What are your thoughts?

Cheers

 

[Spades]

Hiya Rbellaj,
Personally i'd go for a 2 bedder ova a 1 bedder.I'd look for a small block without lifts,gym,swimming pool etc.
I think 1 bedders are more applicable in the city but saying that there's still a market for 1 bedders but more room to move with a 2 bedder in the outer west.

I'm sure someone will be along to add,

Cheers Spades.

 

[monalisa]

Initially I thought a 2 bedroom unit blacktown area, but our broker says 1 bedders are a safer bet. What are your thoughts?

Hi!

Welcome to the forum! Well done taking charge of your goals and dreams.

On what basis has your broker advised you re 1 bedders being a ''safer bet'' ? Have they invested in the Blacktown area themselves?

Are you looking at Blacktown as a suburb? or the Blacktown region? I understand that the Blacktown council is one of the largest council's in NSW.

I would personally be more inclined to look at 2 bedders - there will be a bigger market in comparison to 1 bedders. In my view 1 bedders may be more suited to areas closer to the CBDs.

Monalisa

 

[Colin Rice]

A mentor advised me many years ago to purchase what I could afford at the time.

He said "if you can afford a bedsit then buy one, if you can afford a 1 bedder then buy one, if you can afford a 2 bedder then buy one, if you can afford a 3 bedder then buy one, if you can afford a 4 bedder then buy one!"

You get my point

 

[Rbellaj]

Thanks guys

I was thinking a 2 bedroom too. You guys will probably have a laugh but I was using Blacktown as a starting point because Kochie said it was the next hottest investment spot haha. See I am an ameteur! Should we just start looking at what $350k will get us in areas such as blacktown, bankstown, penrith, parra? I had a look at parra region including westmead and that seems quite expensive now. I am excited to learn a lot, looks like it will be fun once you get the hang of it.

Are a lot of places that you buy already tenanted and if so would you keep the managing agents or shop around? How would you find out who were good agents or not?

Cheers

 

[Aaron_C]

If you buy a property with existing tenants in there I tend to try and screw the existing agent since they have a large incentive to keep the business. Hard to tell if they are a good agent but you gotta try it out.

 

[Cherry Pro]

Agree - a 2 bedder is a good start. However for $350k you could still get a 3 bed home in 2770 which will possibly rent at around the $330 - $360 per week. Might be an idea to compare rental yield as well.

If tenanted and if the tenants are paying current market rent, I would keep the tenants. If not, I'd ask for vacant possession and put in new tenants or check if existing tenants can cope with incremental increase to bring them up to current market rent.

Good luck !

 

[KoopaTroopa]

If you buy a property with existing tenants in there I tend to try and screw the existing agent since they have a large incentive to keep the business. Hard to tell if they are a good agent but you gotta try it out.

Any reason you would want to "screw the existing agent" of the existing tenants?

Cherry Pro's post below is almost exactly the opposite of your view!

If tenanted and if the tenants are paying current market rent, I would keep the tenants.

 

[Aaron_C]

Any reason you would want to "screw the existing agent" of the existing tenants?

Cherry Pro's post below is almost exactly the opposite of your view!

I was talking about keeping the tenants but screwing the existing agent's commission.

 

[monalisa]

Are a lot of places that you buy already tenanted and if so would you keep the managing agents or shop around? How would you find out who were good agents or not?

Cheers

One of our recent purchases had tenants in there. I opted to get vacant possession as the tenants were behind in rent.

When they received the notice to vacate they called the selling agent to ask whether they could bring their rent up to date and could stay (they had been in arrears for 6 months!!)

It just made sense to me to get vacant possession and get my PM to find tenants.

Re using the same agent, just ask other investors who they use in the area for start before deciding to continue with the same agent.

 

[monalisa]

You guys will probably have a laugh but I was using Blacktown as a starting point because Kochie said it was the next hottest investment spot haha. See I am an ameteur! Should we just start looking at what $350k will get us in areas such as blacktown, bankstown, penrith, parra? I had a look at parra region including westmead and that seems quite expensive now. I am excited to learn a lot, looks like it will be fun once you get the hang of it.


Cheers

Margaret Lomas recently said that boat had sailed for the Blacktown region. I personally would buy if I saw something good.

In my view you may be able to find better value in Blacktown.

Parra/Westmead is definitely much more expensive - it is Sydney's second CBD.

You will learn heaps -and it is super exciting once you start buying (and much more exciting once values start moving )

 

[Jacque]

So many opinions already and it really comes down to individual choice. What I will say is that, for Blacktown, I'd be trying to buy a villa or townhouse over a unit- you can still pick up 2 bedders (even 3 beds, but these can be in less desirable complexes or areas) in the sub $350K range but it's getting tough. Lots of activity and buyers out there. Parra and surrounds units only now however but still viable and some capacity to value-add in good locations too.
Best of luck with it all- exciting times!

 

[Scarlett09]

Buying a property that is alreadyd rented

Hi All,

We are also looking for our first investment property

Just wondering what sort of things we should be looking into if the property already has tennants, and how to go about this?? I have a few ideas, such as rent payments (are they up to date), type of lease, term. But what else?

Thanks in advance.