Where & how to buy

[mitras]

Hi,

I just came across this site yesterday while searching for investment properties and reading the forum since. As a background, I live in Sydney & have an IP unit at Blacktown. I am looking for second IP in the range of preferably within $400,000. I prefer not to go for a unit as I pay enough strata for my current IP. I would like to have positive cashflow or minimum from pocket and some capital growth. Can you please give me some ideas of locations?
I am told it is preferable to be closer to you (city wise) to manage even by agents. Do you agree? I am open to investing in two IPs rather than one also.



Thanks in advance.

 

[Propertunity]

I am looking for second IP in the range of preferably within $400,000. I prefer not to go for a unit as I pay enough strata for my current IP. I would like to have positive cashflow or minimum from pocket and some capital growth......

Understood, but remember that home owners generally don't budget for repairs and maintenance - when the HWS breaks down, they have to find $1,200 in one lump sum to fix it.

BC fees on the other hand, allow unit owners to budget for repairs in a more disciplined way - putting aside money every quarter. And the BS fees pay for building insurance, gardening etc. So it is 6 of one and 1/2 dozen of the other to me.

I am told it is preferable to be closer to you (city wise) to manage even by agents. Do you agree?

No, that's nonsense. Many investors invest out-of-state quite successfully.

I am open to investing in two IPs rather than one also.

You won't get much of anything in Sydney for $200K.

You can get a 3brm house on land in the west of the Western suburbs for $220-250K though. These should rent for $350pw +.

 

[mitras]

Thanks Propertunity. I am talking from my own expeerience. I bought a brand new flat at Blacktown @260K in 2005 and after few months Strata changed and the fees went up about $700/- from $330/-. I am not at all an astitute invester (and my hands were full in those days.) and I still have it though I was spending a fair bit after tax. Are there units which can be positively geared or close to? I am a salary earner only.

This time I would like to spend a bit more time & research to do a good job. What are your choices if you could please specify to help?

Hoe can you invest successfully out of state using yourself as the only resouce?

Thanks again. Please help me to do a better job this time!

 

[Andrew_A]

Hi,

I just came across this site yesterday while searching for investment properties and reading the forum since. As a background, I live in Sydney & have an IP unit at Blacktown. I am looking for second IP in the range of preferably within $400,000. I prefer not to go for a unit as I pay enough strata for my current IP. I would like to have positive cashflow or minimum from pocket and some capital growth. Can you please give me some ideas of locations?
I am told it is preferable to be closer to you (city wise) to manage even by agents. Do you agree? I am open to investing in two IPs rather than one also.



Thanks in advance.

The idea that you know your local area well and will likely buy better as a result is a good one, on the other hand you have the government charging land tax when your portfolio reaches a certain size which is a considerable incentive encouraging you to diversify into different states. For your second property land tax wouldn't seem to be an issue but it pays to plan ahead regarding tax/structures/goals etc.

Try learning about the numbers, deposit/net yields/council rates/interest rates and plugging some into a spreadsheet or program until you get a feel for what you are looking for cash flow wise.

 

[fokas]

Another option if you're time poor is to hire the services of a reputable buyers agent who will do anything from the whole kit kaboodle (find the property, check it over for you, arrange paperwork etc) or just assist by sending you potential deals for a fee... there are several great buyers agents on this forum.

However I'm guessing one of their first questions will be "what are you trying to achieve?" so might help to have a solid understanding of that in your mind before hand.

 

[Jake Milne]

Hi Mitras,

What are you trying to achieve?

 

[mumbai]

What areas do you service, Jake?

 

[DamienJ]

Hi,

I am told it is preferable to be closer to you (city wise) to manage even by agents. Do you agree?

Hey mitras,

I've got an IP overseas and don't seem to be experiencing any difficulties managing it at all. Maybe the reason for this is that I've got a trusted agent who has been overseeing my investment for years now.

Personally, I think that areas with a mining sector is a good option for IP in the next coming years especially in Australia. Perth and Gladstone are places that you can look into if you're interested. I'm looking into Gladstone atm and would like to get some feedback on it as well. Anyone?

Thanks.

 

[Jake Milne]

What areas do you service, Jake?

Where are you looking to buy?

...and what are you trying to achieve?

 

[mitras]

I guess I like to have an investment where I have to pay less from pocket and eventually pay it off. I am not just to buy & hold for 2-4 years to make money. I am not a handyman & can't make huge money by renovation other than carpet, painting, bathroom & kitchen (to de done by hiring somebody). I am happy to add a granny flat for extra rent. I was originally looking at Seven hills but it has gone up a lot since GFC. Saying all that, I look forward to moderate CG also. Wish list never ends.......

My first job I guess is to select the suburbs. I am open to other states reading some more posts in the site. I have a bit more time than before and feel happy to learn & do some work myself for Sydney. However, I need help & direction from you guys for selection of the suburb etc. For other states, I definitely need to have a buyer's agent.

Can someone highlight the suburbs for me? Also as a contrast, what are the suburbs for higher CG than positive cashflow?


Jake, which areas do you do?

 

[saiman]

As I said before,

With a granny flat pick a suburb where you can get the most rent out of that you can afford - not just necessarily "out west". Cost to build a granny flat is relatively the same everywhere but in terms of ROI would you rather have one in Vaucluse or Mount Druitt?

IMO suburbs around Blacktown LGA are inundated with mumsies and daddies now looking to jump on the granny flat bandwagon or have been exposed to news articles about the "western sydney boom" who aren't really "stringent" on the numbers like a "real" investor should be....thus you will have a huge amount of competition

Where to buy in terms of your criteria? Forget Sydney and go North to Brisbane. Or if thats too geographically scary, try the lower Hunter region
- rentals are going gangbusters!

 

[Jake Milne]

Hi mitras,

I understand, thanks for that.

My area is Melbourne. If you're looking to add a granny flat to lift yield it can be done here but I wouldn't recommend it as they're more popular in NSW and QLD.

With that being said there are apartments in Melbourne at the $400K mark that yield 5-6% and show good capital growth. If you'd like to know more feel free to get in touch.

----

If you're thinking Western Sydney Jacque, Nathan and Propertunity are good buyer's agents and are all contactable via this forum.

If you're thinking interstate - Andrew from Allens does a good job in Brisbane.

 

[mumbai]

Where are you looking to buy?

...and what are you trying to achieve?

I am looking western sydney, may be regional too and I have got in touch with one of the BAs you mentioned.

 

[norwoodman]

I'm looking into Gladstone atm and would like to get some feedback on it as well. Anyone?

Thanks.

Best time for Gladstone would have been 2-3 years ago. Huge amount of stock coming onto the market at the moment, particularly down in the Boyne/Tannum area and workers camps which are opening quickly now. Also, the workers are dribbling in slower than expected due to construction delays and issues in finding workers. I think there's still some growth left though. Everyone is jumping on the bandwagon now.