Where are we in the current Sydney property cycle?

[darcy13]

Hi Sunfish

council didn't

state govenment did

I"m gurssing your granny flat is attached to the house ?

stuart

 

[LisaP]

Sounds like a plan, Lisa!

Just wondering though - how will you be able to get finance when on a PhD scholarship (if it's the usual $20k pa?) I almost accepted my PhD APA offer until I realised that being in the workforce would make it a lot easier for me to start my property investing journey.

Your subject matter sounds pretty interesting! What year of your PHD are you in?

Cheers

Thanks Tess. I get a total of $33Kpa tax free ($22k from the gov, $10k top up from the unit). Plus, I do some casual contract work as a research assistant for my professor, max of one day a week, due to stipulations of the scholarship, so that's another 10K. I agree - difficult starting a property portfolio when you go from six figures to low income, but the PhD is well worth the short term financial pain.

Due to a combination of good savings history, good mortgage broker, I got pre approval for a loan from CBA, and can borrow up to $346K, so that gives me a price range of between $410k to $425.

Actually, I'll be featured in the April edition of the API magazine talking about the above, and look out for the mention of my research in the next March API e-newsletter.

 

[tess85]

Cool! I subscribe to API so I'll be sure to keep an eye out

 

[skater]

Annualised with assumptions:

Growth: 2.64% compound (20% over 7 years)
Yield: 5.0%
Neg Gearing: 1.0%
Total Return: 8.64% pa

Average mortgage interest expense 2002 - 2009: 7.2%

Net Return: 1.44% pa

Assume 5% deposit on $300K IP: $4,320 return pa on $15,000 invested or 28.8% nominal return.


I'd say 28.8% pa sounds like making money on OPM to me...

Cheers,
Michael

Let me also add, that if you purchased just one year earlier then the growth would have been greater, since we were in the upswing at that time. Also, I have always been able to get a far greater yield than 5% in Blacktown and Campbelltown Councils, so again a greater return.