Trying to choose between two properties

Discussion in 'Where to Buy' started by Sagra, 3rd Sep, 2009.

  1. Sagra

    Sagra Member

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    Hi All,

    Hoping I can use the expertise of this forum to shed some light our way...

    We are buying our first home with investment in mind.

    Ideally we need 3 bedrooms but wouldn't mind on a 2 bed house with potential to add a 3rd.
    We don't want to have a huge mortgage as next year we will be starting a family and want to have a buffer.

    We don't want to go to far from the city and our suburb range is from Zetland through to Petersham, Leichhardt and now we are also considering Earlwood and Botany.

    At present we have a good deposit of $120K and have been looking for apartments in the 500 to 550k mark and houses up to $680 (for 3 bed).


    Anyway, we are very confused about two properties and I am hoping someone here can shed some light.

    3 bed apartment in Botany, close to Eastgardens, for early 500's. The apartment is nice and suits our needs for the moment. Only one window faces the rail line, but there isn't much noise at all. The strata is $950 a quarter.

    2 Bed terrace in leichhardt, for auction, and I believe it would sell for around $680K based on past sales in the area. (land area is 195sqm). It also suit our needs for the moment, although we would need to make an extra loo straight away and eventually add a bedroom, renovate kitchen, bathroom, etc. It certainly has potential for improvement.

    But the price difference is great and will mean a bug difference in repayments - We can afford both, but certainly would be more comfortable paying less.

    Question is, from an investment point of view, which suburb / property is more likely to return better capital growth?

    Sometimes I think that Leichhardt is overpriced and Botany may still develop a lot more in the near future, increasing growth.
    However we can add value to the Leichhardt property, and the unit in Botany will never change,

    Any thoughts please?
     
  2. Malu

    Malu Member

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    Hi

    I am also looking at buying in Botany, but not sure whether it will give me the CP I could gain if I would use my 500 - 600K in other areas.
     
  3. HappyCamper

    HappyCamper Member

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    Don't know a lot about Botany. But you mentioned the terrace in Leichhardt. How much potential for value add is there? Is there a bit of land left? Is it attached on both sides? Is there rear or side access for ease of extension? Does it have a high pitched roof?
     
  4. Sagra

    Sagra Member

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    Thank you for repling, garbage
    Well, yes, there is a larger than usual backyard ( at least for a terrace) and it is detached in one side. But there is quite a bit that can be done inside, such as open up living / kitchen area, new bathroom and add a bedroom with en-suite above (attic).

    I realise that it would all cost money, but I don't believe we would be overcapitalising.

    But on the other hand, as we want to start a family next week, the apartment would leave us with lots more cash and a peaceful atmosphere for a baby....no renovations!!! But maybe no CG either!!!

    So confused!
     
  5. auror

    auror Member

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  6. Sagra

    Sagra Member

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    Auror, you are right, this property is in a great location. The problem is, there is no parking, which is a must for us. But thank you for the suggestion.

    Why would you choose Stanmore over Leichhardt?
     
  7. HappyCamper

    HappyCamper Member

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    It's a 4 bedder.
     
  8. auror

    auror Member

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    I looked in the inner west when purchasing a PPOR. I considered Stanmore but not Leichhardt as Leichhardt was just way too expensive. In Stanmore you get more value for money (as seen in the link I posted) plus it's closer to rail transport, as hubby and I both catch trains to work.
     
  9. marg4000

    marg4000 Member

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    Wow! That would have to be the smallest bathroom I have ever seen!!

    And it is the only bathroom in a 4 bed house....
    Marg
     
  10. Sagra

    Sagra Member

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    Yeah, I know. That probably explain the price. I've notice that Stanmore is getting quite expensive too.

    But back to the topic, any opinions on the Botany apartment?

    My concern is that an apartment in Botany could be a bad investment, considering the building is already 12yo, but the apartment is nice though and the building is going through some fixes. You walk out of the door there are no shops, but it is 5 min drive to Eastgardens Shopping centre.

    So there are pros and cons, but my main concern is capital growth.

    Any thoughts?
     
  11. JustRent

    JustRent Just Rent Sydney

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    History suggests that the larger capital gains are achieved with a larger land component, for this reason alone i would go for the leichhardt property. There is also much more potential to 'value add' as others have suggested. You would also have no problems renting this sort of property in leichhardt, plenty of demand there.

    Good luck
     
  12. Propertunity

    Propertunity Real Estate Buyers Agent

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    Mmmm that's "getting up there" for strata @ $4K pa. Does it have a pool or a lift in the building?

    You're not a kiwi are you? :D

    Buy both then - dilema solved :)

    6 of one and half a dozen of the other. Toss a coin.

    Yes, no, maybe

    That clinches the deal for me straight away. Go for the one with the ability to add value down the track.
     
  13. r2d2

    r2d2 Member

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    From an investment point of view, definitely the terrace if you can afford it.

    In long run, anything with land attached to it will always have high CG compared to apartment. You have just mentioned that there is opportunity to add value as well.

    I don't know how the apartment in Botany looks but for early 500s you can almost get a three bedder in some areas of lower north shore. The strata seem to be a bit expensive as well.

    For about 600k - 650k, there are still much to choice in the inner west area. e.g.

    http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2007952376

    This is 10 mins walk to a station which will get you into city via express train in 15 mins. 5 mins walk to a park. Very leafy, quite street. Concord hospital is about 15 - 20 mins drive. and there are lots of schools around if you are thinking ahead :)

    Good luck.
     
  14. fokas

    fokas Absolute Newb

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    It's also cosmetically already done up with a crappy kitchen and little room for improvement...and someone has already mentioned the lack of parking.

    I would be going for the Leichhardt property personally myself.
    Yes it would be easier to not be renovating whilst having kids but timing, planning and organisation (and contraception! ;) ) can mean you have made a headway into making your home suitable/renovating just in time before your family expands.
    Choosing Botany (to me) seems like the comfortable way.
     
  15. Sagra

    Sagra Member

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    Change of plans....

    Thank you for all your replies...It has been very helpful...

    Unfortunately the auction at Leichhardt didn't work out for us and we changed our mind about the Botany apartment as it gets no sun at all.

    So we are back to square one!

    Any suggestions where we can find a 2-3 bedroom, livable house (happy to do some work in future) for max $630K, not too far to drive to Alexandria (I work there) and near the train line (for my hubby)?

    We did like a semi in Earlwood today, but we are yet unfamiliar with the suburb. Any help in terms of the security in the area & potential capital growth would also be appreciated?

    Thanks Guys
     
  16. HappyCamper

    HappyCamper Member

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    Earlwood doesn't really have a train line. It's near Bardwell Park station on the southern side, but there's a big slope to get up/down. Canterbury station would be on the northern end. Have a look around Arncliffe, Bardwell Valley and Turella. All with either the Sutherland or Airport train lines nearby and 10 minutes drive to Alexandria. You'll get detached 3 bedroom houses for $500-700k. I've seen federation houses sell for as little as $550k in Arncliffe.
     
  17. Joe C

    Joe C Member

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