Thought on Mt Druitt Surrounding Area, 2770

Hi All,

What do you guys think of LP or Whalan?I lately bought into that area and feeling nervous that I made the wrong decision?I went a few times into that area, not really a nice suburb to live in but if I look it logically from different perspective e.g map (I can see the surrounding suburbs have gone up in price e.g Ropes crossing, blacktown). Has anyone of you ever been into the area at night time?

I've been told that many investors bought into that area. How this will affect the price in the future?Is there any further development into that area e.g transportation?Will there be any cleanup on the housing commission?

Thank you
 
Yup, I've lived there, have property there (4 bagger). Walked the streets at night. Its a lot better now than 20years ago.

Heaps of HC places have been sold. There area has seen great capital growth over the last 12 months and hopefully more to come. There's a new Masters joint out that way. Relax! there is nothing to worry about.
 
seems you know the area well,

well, im having a debate with my friend,

my view is that purely from % perspective, the HC area homes in the medium to long term will do better, because the crappy area becomes less crappy, whilst nearyby, the good areas still remain good,

ie they have more upside potential, just like the saying "better to buy the worst house on the best st, vs the best house in the worst st"

however, my friend thinks, they are crappy for a reason and will always be far behind the not so bad areas

whats your take?
 
TNT, I reckon the area is dynamite!

Less Houso's. I think you are right and your mate has somewhat missed the point. The only reason the area was crappy was because of the crappy people. Now there is less of them. Now you can get big blocks !

Remember there was a time when Balmain was a crappy area. Things change.
 
TNT, I reckon the area is dynamite!

Less Houso's. I think you are right and your mate has somewhat missed the point. The only reason the area was crappy was because of the crappy people. Now there is less of them. Now you can get big blocks !

Remember there was a time when Balmain was a crappy area. Things change.

oh good to see im not the only one, and ive only had 1 beer tonight!!

im checking out ashmont and tolland (yeah yeah they are pretty bad) but most people ive spoken to locals, non locals, PMs, sales agents, reckon its not going to clean up or take absolutely ages and wouldnt recommened it
 
Hi All,

What do you guys think of LP or Whalan?I lately bought into that area and feeling nervous that I made the wrong decision?I went a few times into that area, not really a nice suburb to live in but if I look it logically from different perspective e.g map (I can see the surrounding suburbs have gone up in price e.g Ropes crossing, blacktown). Has anyone of you ever been into the area at night time?

I've been told that many investors bought into that area. How this will affect the price in the future?Is there any further development into that area e.g transportation?Will there be any cleanup on the housing commission?

Thank you
Hi,
It is all about affordability and infrastructure,2770 is close to all transport hubs and a lot of new large businesses are building close to the area and I feel it still has a way to go ,the area has changed quite a lot over the years with a lot of the HC sold to either investors or home occupiers I lived in the area myself for quite a few years and even then the place was not really as bad lots of people said ,I purchased their myself years ago and have seen some excellent growth,I am wondering why you purchased there in the first place though did you drive around the area or just follow the crowd.
Macca446
 
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I purchased there a couple of years ago and have seen positive cash-flow AND excellent capital growth, which as you know is impossible. :)

Only wish I had bought more.
 
Hi All,

What do you guys think of LP or Whalan?I lately bought into that area and feeling nervous that I made the wrong decision?I went a few times into that area, not really a nice suburb to live in but if I look it logically from different perspective e.g map (I can see the surrounding suburbs have gone up in price e.g Ropes crossing, blacktown). Has anyone of you ever been into the area at night time?

u
LOL!

Yes, lived in Lethbridge Park for quite a few years & have several IPs there as well as the surrounding suburbs. As Datto said, it's not that bad at all. Are there undesirables there? Yes! But that is also true of most places in this country. Keep your properties nice and have a good PM and you won't have too many issues.

im checking out ashmont and tolland (yeah yeah they are pretty bad) but most people ive spoken to locals, non locals, PMs, sales agents, reckon its not going to clean up or take absolutely ages and wouldnt recommened it
I went to Wagga a few weeks ago & checked out some properties in both Tolland & Ashmont. Now I've got a thick skin and nothing much scares me, but those suburbs WERE scary. There is a very discernible change from one street to the next.
 
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I went to Wagga a few weeks ago & checked out some properties in both Tolland & Ashmont. Now I've got a thick skin and nothing much scares me, but those suburbs WERE scary. There is a very discernible change from one street to the next.

Agree, the worst sts of ashmont and tolland can be scary,

dangerous? Id say not, like you arent going to get stabbed unless you provoke or deserve it

dodgy? hell yes,
ive had a vacant property vandalised bigtime three times in 2 months, that I had to get the windows boarded it up,

I feel the market is trying to push its way up, like the rest of the state, however, the crappyness of the area is holding it back,

I think it will be another 12 months before or if any movement,

as for the area cleaning up, its happening, but ever so slowly, heaps of the HC have sold off but not completely, investors going in and cleaning them up and renting them out to any decent tenant, but at the same time, not many of them want to live in there, which is understandable. The big question is, once the HC get sold off, where do the undesirables go?? are they forced to improve slightly their behaviour to be able to have a house, or do they simply move further out or away????

it will happen but it will take 18months+ in my opinion.
 
I own properties in Mt. Druitt and have seen an excellent CG plus positive cash flow.
The area has increased in price substantially over the last year at over 20%, not sure if it will go more as the move has been largely driven by investors. People who live there can't afford to buy and won't be able for many years to come. I personally don't believe that the area will go through a significant gentrification phase, at least quickly, so be careful especially after the recent price increase.

Plenty of people who have bought there 10 years ago have not seen any CG, only the ones who bought in 2009+ when prices where really cheap. Old 2br shoe boxes close to the train station were going for 160-180K, now they are 280K. Rent has not changed 280-300 p/w.
Renting out property close to the train station is not a problem and tenants are generally good, just don't let your real estate agent pick them, go and have a look yourself. Further out where mostly locals rent the tenants are hard to come by and can cause more pain. You have to use not traditional channels to find tenants as many won't pass normal tenancy checks (no job, previous rental defaults etc.), if there is nothing that can be destroyed in your property and you have landlord insurance then these problems can be largely mitigated.
 
Thank you all for the answers

I'm tempted to buy a few more but I'm holding back because I'm worried that it won't be growing furthermore in the next 5 years due to the stigma, my other concern is the tenant. Eventhough I use RE agent to manage it but I heard bad story from my brother in law who had a property in Blacktown where his property is being trashed and he needs to call sheriff to escort them out

In the terms of cash flow is positive or neutral so nothing to lose really, but not quite sure about CG. My assumption (and also my wishful thinking) is nowadays people/new family need to go further out to get a house with limited budget as the inner ring is getting more expensive which then eventually will drive the price up again (maybe within 10 years)
 
For new investors or someone still wants to invest in Sydney, this area is fine. However, you must expect some emergency calls coming in on the Saturday morning while you are eating breakfast.

I had one property in Emerton before. The total amount of various issues relating to the human being on this property, is much more than the total issues of my other 10 Sydney properties all together.

Finally, you must have all insurances in place for each property.

At the end, you can make money over there, but you need to spend more time, emotion and energy for it.
 
We bought in Emerton in April 2013 for 250k. Got a reval report yesterday from AMP @ 320k. Tenant has been in the property for 8 years or so. Absolutely no dramas at all so far.....touchwood. I wouldn't hesitate buying in 2770 again. The problem is the numbers don't stack up anymore if you want to be Positively or Neutrally geared.
 
In the terms of cash flow is positive or neutral so nothing to lose really, but not quite sure about CG.

You need capital growth as well.

Say the IP is cash-flow neutral, like really paying for itself, no holding costs at all, maybe even a bit of profit each year.

Hold it for 7 years, then sell.

At the end of the 7 years you need to get the original price paid plus buying costs, plus the selling costs. What's left over is pure profit. That only comes from capital growth.

The profit needs to be more than you'd get from the bank, plus inflation otherwise it would have been easier to leave the money in the bank. So you really need (at the moment) about 3%+3% = 6% growth over the time, just to make it worth while.

This is why NOT buying at the top of the property cycle is important IMHO. You need to get some growth just to have made all that mucking around with property managers and tenants worth while. (I think I just channeled Daz for a moment there.) Get as much growth in the early early years as you can. Renovating and developing is important: instant growth.

When I bought in 2010 the property values were just returning to or passing the 2003 levels. Negatively geared investment strategies would not have been a financial success. Had they held on for just a couple of years longer though...

Which is why you never sell unless you have to.
 
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For new investors or someone still wants to invest in Sydney, this area is fine. However, you must expect some emergency calls coming in on the Saturday morning while you are eating breakfast.

I had one property in Emerton before. The total amount of various issues relating to the human being on this property, is much more than the total issues of my other 10 Sydney properties all together.

Finally, you must have all insurances in place for each property.

At the end, you can make money over there, but you need to spend more time, emotion and energy for it.

So, you only have one in the area and its causing more grief than your other properties? You know, sometimes it's just the luck of the draw, not the area itself, you know.

I have well in excess of 10 properties, and many in 2770. I've had my 2770 properties for over 10 years. In that time I've had bad tenants and I've had good tenants. I reckon I've seen almost everything. I've got two properties there with long term tenants, who treat the place as their own.

In short, tenant selection is vital, but that is true no matter where you hold properties. As for insurance, well unless you have deep enough pockets to self-insure, it's something you need to think about for ALL your properties, not just 2770.
 
Havent had any reval in 2770 yet as I am too busy to reno, but looking at comparables, when I do it will be a good return.

I bought a 3br house a bit over a year ago for very low 200's, rented at $310pw. Gains similar to vaughan.

2770 isnt for everyone, but if you can get past the "omg I would never live here" mindset and realise that there are many many people who do want to live there, you are all set.
 
This area doesn't increase in value very often, and it has just experienced massive capital growth which indicates that once it's finished this run it will be quiet for a while as far as growth is concerned. Yields are low here now, so you may be better off investing somewhere where capital growth is steadier until the rent improves compared to price, which probably won't happen until interest rates increaseand stay higher for a while.
 
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