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Where/What would you buy for your first IP, if your limit was $300,000?

Discussion in 'Real Estate' started by Sk3tChY, 28th Aug, 2007.

  1. Sk3tChY

    Sk3tChY Well-Known Member

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    Ok, well im hoping to buy my first property by mid-late 2008. Initially i'll be living in it for 6 months to claim FHOG, and do some minor renovations, to hopefully get some quick capital gains, and improve rental return.

    I'll be hoping to find a place in Sydney area for no more than $300,000.

    So my question is: If you were in my situation, where/what would you buy?

    I've been considering areas like Sutherland and Parramatta. I've also thought about perhaps getting a small place in the heart of Sydneys CBD, what's capital growth like in a small studio apartment in Sydneys CBD?
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    The problem with small studio apartments is that you may have difficulty getting finance for them - lenders don't like the really small apartments (anything less than 50m2 can be troublesome). Check your finance first !!

    I think Parramatta is possibly a good choice - I don't know the area from an investment point of view since I've never researched it, but I do know there is a lot of commercial growth in that area - a lot of business is being encouraged to move out there to avoid inner-city congestion.

    Alternatively look for other major suburban centers which are getting a lot of growth ... St. Leonards, Chatswood, Hornsby are three I know of on the North Shore. That isn't a recommendation - it's a suggestion of areas to research.
     
  3. Sk3tChY

    Sk3tChY Well-Known Member

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    Of course, thanks for the suggestion sim. I hadn't really looked into those area's too much, although they do seem like they'd be a good start.

    As far as finance for a studio is concerned, hypothetically say it wasn't a problem, and I could easily get the loan for a Studio in the heart of Sydneys CBD, in your opinion do you think that there would be much room for capital growth?
     
  4. voigtstr

    voigtstr Well-Known Member

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    Look further afield. Our unit in Austins Ferry Tasmania cost 180k. The next house we are looking to buy (as a ppor) would be up to 280k. After that we will probably be looking around the 250k mark again. Perhaps in Hobart, perhaps in North Geelong.
     
  5. Sk3tChY

    Sk3tChY Well-Known Member

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    I see, I was thinking perhaps looking interstate a little later. I'd probably consider QLD before hobart and the likes tho.

    For now, i'm thinking somewhere in Sydney as I'd be living in the property for the first 6 months.
     
  6. Jacque

    Jacque Team InvestEd

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    Hi SK3

    There's a no. of options for your money- ranging from inner city studios to freestanding homes in parts of Western Sydney. Do yourself a favour and buy the latest Residex report to ascertain those suburbs within your budget that have had solid cg rates over the last decade, and consider areas such as Parra that are undergoing infrastructure changes.

    Studios can be more difficult to finance, and some of them are no bigger than a crummy hotel room so if you do go down this path, at least find one with parking or another saleable feature such as a view, balcony, bed alcove, enclosed laundry etc.

    Parra is a mini CBD and has many many units, both old and new, to select from. Keep in mind when considering an area such as this, to stick to smaller blocks (to maximise your land value content) in quieter streets, that have appealing features to both owners and tenants. Such as balcony, parking, own laundry facilities, BIR's, spacious living areas and, above all, well cared for strata management in place.

    Good luck with your search :)
     
  7. Sk3tChY

    Sk3tChY Well-Known Member

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    Thank you VERY much jacque for your VERY useful response.

    However I didn't quite understand this statement;
    "stick to smaller blocks (to maximise your land value content) in quieter streets"

    Basically you mean blocks with less units, because it means the land is divided up by less people?

    Also, where do I get my hands on this Residex report..?
     
  8. DaveA

    DaveA Well-Known Member

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    also places like rockdale/hurstville have 1 bedders with carparking for around the 300k mark... even some of the older buildings you can pick up a 2 bedder

    just something to think about

    ps: try their website, its on there
     
  9. voigtstr

    voigtstr Well-Known Member

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    Sk3tchy, does it have to be Sydney?
     
  10. jaypee

    jaypee Member

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  11. Sk3tChY

    Sk3tChY Well-Known Member

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    Yeh Dave, I've really considered Hurstville and Rockdale area as well. You can pick up like a 2br quite easily in both areas for $300k, know anything about capital growth around those areas?

    For now, yes. I will originally move into the property for 6 months to claim the FHOG and make the property my PPOR, so its essential that its in Sydney, and relatively close to the city + train station, seeing as that where I work.

    Also I think theres better capital growth if the property is closer to the city, and near a train station. :p

    Thanks heaps jaypee. And yeah, i've considered a place in blacktown, but ultimately I dont think the rental return would be very good, nor would I really like the type of tennants the property would attract.

    I've heard that alot of the times when you buy in a bad area, that bad things happen to your property. I could see the property getting broken into, or the tennants just trashing it.
     
  12. katariana

    katariana New Member

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  13. Tropo

    Tropo Well-Known Member

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    Not bad...:D
    I prefer French Riviera :p
     
  14. Sk3tChY

    Sk3tChY Well-Known Member

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    Buy overseas? I never really thought to much about that... seems a little too awkward to me...
     
  15. Jacque

    Jacque Team InvestEd

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    If your budget stretched to $400K I'd be looking at houses (rather than units) in suburbs such as Seven Hills- has the benefit of strong historical cg, rising yields and a train line. Yes, you need to be careful to select your streets however I believe it presents a great entry price into Sydney's current market and has a lot going for it position wise- proximity to both M7 and M2 is ideal and is neighbouring the more highly regarded Hills District.
    Stay away from the Lalor Park side (HC homes) and don't pick something too close to the RSL club or right next to the railway for starters.

    Others suburbs to consider would include Parra surrounds including Northmead and Winston Hills.
     
  16. Sk3tChY

    Sk3tChY Well-Known Member

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    Well im only 20, and this would be my first property, so I don't think i'd be able to stretch to $400,000. I wanna try get it asap, but thanks for all the advice. It seems like parramatta seems like quite a popular area.

    Any thoughts on Sutherland? Its a good area, has a cop station, schools, near a train station, and is about a 40min train trip from the city. Sutherland is also a major stop, so basically all trains stop there.
     
  17. Jacque

    Jacque Team InvestEd

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    Sorry don't know Sutherland side but I'm sure others can provide some local knowledge. Actually HandyAndy will be able to help as he lives down that way somewhere :)
     
  18. Sk3tChY

    Sk3tChY Well-Known Member

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    HandyAndy where art thou!

    Grace us with your wisdom!
     
  19. khc

    khc Member

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    Hi everyone, I'm new here.... Interestingly I have almost exactly the same question as Sk3tChY...I'm also looking at Parra, Westmead, Northmead area...
    The Domain website shows the long term trend for northmead (units) is 8%, westmead, 4.5% and parramatta 6.5%.

    1. Does anyone know if these figures are reliable (from past experience) ?

    2. Northmead is close to Westmead hospital and less crowded than both Parra or Westmead. However, it's not as convenient as westmead if you have to take train to the city...Do you have any idea why the figures are so different between westmead and northmead ?

    Thanks,
     
  20. Sk3tChY

    Sk3tChY Well-Known Member

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    I would be under the impression that parra would be better than both northmead and westmead, I don't see why they'd both be higher, only thing that comes to mind for me is all the commercial area, although I'd see that as a somewhat benefit.. :confused: