Terrigal Townhouse - good investment???

[Nicc73]

Hi everyone,
I came to this forum via InvestEd.com.au and recommendations I received there to read Jan Somers books. Well, have done so and husband and I have decided to buy 1st IP - now the hard part is WHERE???

Long story short, my parents have a townhouse in Terrigal (3br, 2 bath, 2 car) that they want to sell - they bought with a view to retiring there but have decided they like Sydney (and their two new grandchildren!) too much. We are considering buying it - or possibly half of it - from them.
Am yet to do all the figures properly but assuming we could stretch to the full amount - between 450 and 500k - do you think there is still potential for good capital growth in Terrigal?? That is my main concern.
Alternately, would we be better to buy half and also look at an apartment/house in a capital city?

From what I have seen on the net, it is in the most desirable part of Terrigal (Terrigal bowl/basin) and the complex is nice - pool, playground. It is also in a good location within the complex.

Any opinions, suggestions with regards to anything to pay particular attention to, would be much appreciated.

Cheers!

 

[phil]

G'day Nicc73,

Personally I can't be of assistance since I dont follow the central coast, but here are some recent threads on the region which you may find interesting.

Phil.


http://www.somersoft.com/forums/showthread.php?t=36292&highlight=terrigal
http://www.somersoft.com/forums/showthread.php?t=33362&highlight=terrigal
http://www.somersoft.com/forums/showthread.php?t=37500&highlight=terrigal

 

[Perp]

Nicc73, why are you considering buying this property? Is it because you've scanned the market and your parents just coincidentally own the one property amongst the tens of thousands for sale that's the best investment for you? Or are your parents having difficulty selling it? Or are they wanting to save on real estate commission by selling privately? Or are they going to sell it to you for a bargain price?

 

[Jayro]

Terrigal is certainly a lovely part of the coast and there is certain to be more growth in the area down the track. However that doesnt mean that this particular townhouse is a good investment just because the area should see further CG. You will need some figures such as expected rental return, fee's such as strata etc especially with a pool being in the complex before you can determine if its a good investment for you.

A quick look shows terrigal median house price drop of about 6% over the last 12 months and a low rental yield of 3.5%, with an average median house price of $520k approx. Units in Terrigal have had better growth but the rental yield is only 2.5%. So as far as an investment goes it depends what your looking for but those numbers dont look too rosy IMO.

A friend has recently purchsed a nice tri level property in terrigal and after going down to see him I must say that it sure is very nice down there but not sure id be buying there for an IP. Then again if you were looking for a big -ve geared property and could handle the losses with the view of future CG then it may suit you.

Jayro

 

[Nicc73]

Thank you phil, ozperp and jayro for your replies - some good food for thought there...

ozperp - it's a bit of a mix of all those reasons. We would buy at a good price since parents wouldn't need to pay agents commission etc. There are probably better investments out there but my husband and I are want to 'overanalyse' this type of thing and never get anywhere - I was thinking if this is not a bad investment, let's get this under our belts and try and find something even better for the next one....

jayro - you are right, I need to fully look at the figures - what is the best way to do this - would you suggest investing in the PIA software - especially as we aim to purchase more IPs down the track?
The yield on this place is not too bad but I will do some more work on the numbers - husband o/s so I will crunch the numbers and hopefully we will make a decision when he gets back in a couple of weeks...

will let you all know how I go - thanks again