Need help starting!

Real estate agent said could get $350 a week, possibly a bit more.

So assuming a purchase price of $355 000 (assuming no discounting)

Then rental yield = (350 X 52) / 355 000 = 5.12% ...decent?

The other property I am considering is:
http://www.realestate.com.au/property-house-nsw-blacktown-107541345

 

Mark

5.1% is not good enough and especially now because we are entering a period of low growth. Take your time and find something with better yields.

This means either buying something cheaper or something with higher rent
What do you think of this?
http://www.domain.com.au/Property/For-Sale/House/NSW/Doonside/?adid=2009118229

 

Thanks,

Looks decent but I have been trying to avoid around Doonside due to poor reputation etc.

I've read several things that say to focus more on areas with stronger capital gains rather than stronger rental yields, I would have thought that Blacktown would have better capital gains than Doonside despite the lower rental yields ?

If I'm focusing on rental yield, wouldn't I be better off purchasing a unit in Parramatta? ..

 

Mark

Don't worry about the reputation, suburbs do change and Doonside will be one of those quiet achievers.

I think you should forget the capital gain as it won't be coming any time soon and concentrate on getting a reasonable yield.
A Unit in Paramatta, Toongabbie or elsewhere could also be an option.

That house in Doonside isn't bad.
If you can find a house on a decent size and flat block you'll also have the option to develop it one day. I don't know what the minimum size for a duplex is in Blacktown but I'm guessing 600m and of certain minimum width?
If the block is small or narrow or isn't flat it won't be a good choice.

 

Hi Mark

I've bought for a no. of buyers in the Blacktown area and know it well. The low risk flood zone would warrant further investigation by your conveyancer as every investor has a different risk profile. As Bill has said, it wouldn't worry him however this is something you need to weigh up for yourself.
The house appears to be high-set, however, and my guess is that the zone would be limited to the 1 in 100 yrs zone- it wouldn't bother me but I'm not you Do your due diligence here.

This house is realistically too far from the station- my cutoff street in this area is actually Cambridge St, as it's a 2km walk to the station. Buyers tend to pay more for proximity to rail in this part of North Blacktown.

This house has been listed since mid June and has had a price drop from $365K. It's typical of many in the area- built approx 40 yrs ago and refurbed with panelling and/or wallpaper in the 70's/80's! I'd also be wary of any road noise from nearby Sunnyholt Rd - this road is likely to be widened in the future but again always check these things with your legal rep who will review the contract for you.

Given recent rents in the area I wouldn't think that $350-370 per week would be difficult to achieve. A physical inspection, however, is definitely warranted before clarifying this with a property manager.
Best of luck in your search!

 

Thanks for both your input Bill and Jacque.

I am still considering what type of property I want and the location ... it's a very difficult and daunting decision to make!!

Parramatta looks like it has a lot to offer but I worry about over supply of units in Parramatta ..there seems to be hundreds of units in Parramatta for rent!!

Does anyone have any experience investing around the Ryde area? There are decent apartments in the mid to high 300's ..I'm guessing trying to avoid Victoria Rd would be a good idea due to noise.

 

Hi Mark

Both Ryde and Parra areas have a lot of units but you do need to remember that Parra is a CBD by itself (2nd in size to Sydney) so of course there's going to be more medium and high density dwellings.

For a budget of $400K also check out Gladesville and West Ryde for value for money right now. For $300K's try Parramatta, Westmead, Harris Park.
Happy searching!

 

Hi Mark,

Not sure where you are upto with your purchase. It is always difficult to know where to buy, I would be guided by Jacque she has a lot of experience in purchasing and the areas which have good returns. I would also suggest you purchase near somewhere you know rather than a suburb you know nothing about. But you should research extensively.

In relation to previous comments about the First Home Owners Grant and not having to live in the property but just get electricity. I would caution against this, the Office of State Revenue are constantly checking residency requirements of buyers and recently prosecuted someone who had not lived there

http://www.osr.nsw.gov.au/lib/doc/media/20110805_first_home_benefits_fraud.pdf

If you are looking to purchase an investment property that is great, but don't try to get grants when you aren't entitled.

You may be able to purchase the investment property and claim the grant on another property at a later date:

Eligibility - NSW Office of State Revenue

I would suggest you do some homework.


When you do find a property, you should ask the agent to provide you with a copy of the contract and have your conveyancer check it over for you.

Good luck

 

I wouldn't be waiting till a later date. They're scrapping the first home buyers stamp duty exemptions after the 31st December 2011.

I'd be doing my best to take advantage of the stamp duty exemptions while they're still in place, it saves you a hell of a lot of money.

 

Hi,

I was mainly discussing the grant. Yes the stamp duty is being scrapped so if you don't purchase brand new or vacant land to be built on after 1 Jan 2012 you will not get any stamp duty assistance.

Whilst the exemption does save you heaps, you still have to weigh up all the pros and cons and what is the best scenario for you.

I see a lot of first home buyers buying properties chasing the grants and the exemptions only to come back to me 18 months later having to sell because they can't afford it as they over streched themselves. I am always cautious for first home buyers to be able to afford it first and then if they receive any grants/exemptions then that is a bonus. You have to be careful and do your homework.

I agree it is great to get this assistance and if you are in the right place at the right time take it BUT dont do it or push yourself just because it is stopping.

Having said that there is still 3 1/2 months left for you to get all your research done and buy a property this year.

Good luck