Which property to buy please? Urgent suggestions please

Hi there all.

Being relatively new to the investment scene I've come to get your advice on a predicament I'm in.

Background: Have an investment in Mount Druitt that is doing very nicely. Good capital return and about 7% gross rental yield.
The market has moved so fast out there it's really moved beyond us to buy now.
We are now looking elsewhere for cheaper housing with the strategy to increase cash flow. By increasing cash flow, we aim drive down what we owe on Mount Druitt, and banks are also more happy to lend money for another property with cash positive property and this help build our portfolio.
We have found an area with good rental yields and high demand. I have been looking around some properties today.......

Dilemma: do I buy a single plot of land, with four units on it for $330,000 with a rental yield of 8.6% or do I look to buy 2 properties for $150,000 each, both with just under 8% yield?

My thoughts:

- on the face of it the 4 units looks good to me.... But
- although not necessarily in for the capital growth, if the area does go up, do I lose out on having just the one as opposed to the 2 plots?
- Resale: Although I see both options as long term, if I want to sell, what is the resale like on land with units on it as opposed to just one house? Don't I limit myself to just investors?

I'm sure I should be thinking of other things here so please let me have your thoughts.
Is there more investment opportunities in buying units/flats as opposed to individual houses?

Many thanks in advance for your help.
 
Hi there all.

Being relatively new to the investment scene I've come to get your advice on a predicament I'm in.

Background: Have an investment in Mount Druitt that is doing very nicely. Good capital return and about 7% gross rental yield.
The market has moved so fast out there it's really moved beyond us to buy now.
We are now looking elsewhere for cheaper housing with the strategy to increase cash flow. By increasing cash flow, we aim drive down what we owe on Mount Druitt, and banks are also more happy to lend money for another property with cash positive property and this help build our portfolio.
We have found an area with good rental yields and high demand. I have been looking around some properties today.......

Dilemma: do I buy a single plot of land, with four units on it for $330,000 with a rental yield of 8.6% or do I look to buy 2 properties for $150,000 each, both with just under 8% yield?

My thoughts:

- on the face of it the 4 units looks good to me.... But
- although not necessarily in for the capital growth, if the area does go up, do I lose out on having just the one as opposed to the 2 plots?
- Resale: Although I see both options as long term, if I want to sell, what is the resale like on land with units on it as opposed to just one house? Don't I limit myself to just investors?

I'm sure I should be thinking of other things here so please let me have your thoughts.
Is there more investment opportunities in buying units/flats as opposed to individual houses?

Many thanks in advance for your help.

You might find the house have a better return

Unit blocks have high council rates - so check this out

Maybe better bargaining with the units though

However I'm lead to believe it's harder to get finance for anything over 3 on a block - you might need a bigger deposit for the units which is not ideal

Also are the units really low maintenance - brick or besser block?
A couple of old weatherboards will have some maintenance and upkeep

I like weatherboard as I reckon there's more character and the look will stand the test of time but if it's a pure cash flow play then it might be a hindrance

As you can see no clear cut answer
 
Thanks Cassandra and Strongy. Much appreciated.
There is maintenance needed and they are weatherboard fibro.

I'll look into the council rates for sure as this will affect net yield, thanks, and also chat to the bank re deposit.

Any further things to consider?
Thanks again.
 
...By increasing cash flow, we aim drive down what we owe on Mount Druitt,
Why? :confused: It is already cash flow positive.

Think about pulling some of the equity out and using for deposits on more property, is what I'd be doing (without knowing your personal financial situation).....together with any savings you can muster.

Dilemma: do I buy a single plot of land, with four units on it for $330,000 with a rental yield of 8.6% or do I look to buy 2 properties for $150,000 each, both with just under 8% yield?
First world problems hey? :)

Usually these investments are low Capital Growth (which is the opposite of an investor's primary reason for buying property as an investment, unless you want to buy 150 properties making $10pw :eek:)

Is there more investment opportunities in buying units/flats as opposed to individual houses?
Look to buying unit blocks that can be renovated and strata titled as a value add, with the possibility of selling 3 and keeping 1 mortgage free? or keeping all or some.
Also bear in mind that buying a block of units can put you into paying Land Tax immediately (depending on land value).
 
As Propertunity said, why would you pay down Mt Druitt property?

I think - Buy quality. Bread and butter. I wouldn't haste into buying a unit block - given the price, assume it's regional.

All that glitters is not gold.

Slow down.....because hasty decisions can bite back!
 
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