To Buy an Older Unit in a Good Suburb or a Newer Unit in an Average Suburb

[davidts]

Hi All,

I have the opportunity to either purchase an IP in Harris Park or Guildford. Both are 2br, similar size. Guildford has secure garage, Harris Park has car port. Both are 5 - 10 mins from their respective stations.

The unit in Harris Park is in a block that is over 20 years old, but it is fairly modern inside, so no work is required.

The unit in Guildford is 6 years old so everything is brand new.

Both properties are the same price $300K, and rent in both areas is similar $380 - $400pw. I would get better tax dereciation with the unit in Guildford, but Harris Park is a more desriable suburb. My plan is to hold the unit for 5 - 10 years for CG.

So which unit would you buy?

Thanks.

 

[skater]

I'm confused! You say

I have the opportunity to either purchase

Surely you have the opportunity to buy hundreds of properties, just look at what is available on Realestate.com.au, not just those two.

So......have you checked out everything and these two are the ones that you feel are the most suitable for you, OR have you been offered these two from someone/somewhere else?

Now, there is a big difference here. The second suggestion tells me that you are allowing someone else make the purchasing decisions for you. What advice have you been given so far?

 

[davidts]

I have checked out both properties, and done my research on both. Initially, I was looking at Harris Park, but cheap units there now are hard to come by. So I decide to looking a bit further away from Parramatta and found a place in Guildford. I put an offer in, yet to be accepted, but on the same day an agent offered to show a place in Harris. I had a look at it and it is ok. As I said, not as new as the place in Guildford. I guess I am hoping the ripple effect from Parramatta will take hold in Guildford.

 

[Nigel Kibel]

In my view if you are looking at just a long term investment then you should look at getting something that will produce the highest level of capital growth. I am not an expert in the areas you are talking about, however from your point the older property is in a better area. Always go for the better location.

A new property may give you a better deduction but remember you are paying for that in the price of the Unit. Negative gearing should be a benefit but the deal always has to stand on its own

 

[Corey Batt]

In 10 years the newer unit becomes old, but the older unit stays the same.

I'd generally go for the older unit, reno's solve most problems. Then you potential have a good CG potential property with a decent rent from tarting it up.

 

[Dazzakun]

Guildford has a higher crime rate that of Harris Park.
HP has a lot of indians, the area is smaller
Guildford has a lot of Middle eastern, the area is much bigger
Demographically speaking, I would choose HP as its much closer to Parra, but you are looking at higher maintenance costs.
I have IP in these areas.

 

[Jake Milne]

Location, Location, Location. Go with the better suburb.

Older properties may have less depreciation and more maintenance but they have a track record so you can see how they have performed. New buildings have no track record and are therefore more speculative (risky) than established property.

New buildings often include a premium rolled into the purchase price where as established properties usually do not.

 

[devank]

I guess I am hoping the ripple effect from Parramatta will take hold in Guildford.

You need a strong wave for the ripple effect to reach Guildford!

HP has a lot of indians, the area is smaller
Guildford has a lot of Middle eastern, the area is much bigger

Indian community is slowly replacing the Middle Eastern community in Harris Park.

I would personally prefer HP compared to Guildford for following reason.
1. On Western Train line
2. Lot closer to parra
3. Parra is filling up
4. There are more Indian students & recently arrived professionals compared to ME.
5. I prefer older unit than a new unit even in the same suburb.