Another real life example of why you should always consider property as a LONG TERM (ie: at least one property cycle of approx 8-10 yrs) investment. Tonight I attended an auction and witnessed one very happy buyer purchase a near new 2 bed 2 bath unit on the Baulkham Hills/Castle Hill border for an amazing $301,000. The vendor must have been one very desperate seller, as he paid $470,000 for it as a new unit (or possibly OTP) back at the peak of the Sydney boom, end of 2003 Very sad for the vendor, but what a bargain for the buyer My pre-auction estimate had actually been low $400K's I wonder how much more the vendor could have got if he'd sold it private treaty. One wonders.....
Bargain! That would have to be +vely geared even before taking into account depreciation. If you can get a deep discount (albeit off an inflated previous price) then the potentially lower capital growth from a near new unit like this is less of an issue I guess. Hmmm... may have to think about engaging a skilled buyers' agent to hunt down these bargains... N.
Don't we all love a bargain too?! Unfortunately, however, though this property was a real steal (in MHO) the gross rental yield is more likely to be around the 5.5% mark as similar units of this type are currently renting for the $310-$330 range. Not positively cashflowed yet my friend I am noticing, however, a real decrease in the no. of available rentals in the local papers. At its peak, the local Hills News and Shire Times were carrying up to 7-8 pages of rentals, with loads of colour pics. Recently, we're down to 3-4. I'm also looking for a rental for a current client, and the lower price brackets for houses ($290-370) are being snapped up sooner than they were this time last year. Bring on those rising rents!!!
