Campbelltown or Penrith in Sydney

I have investments (both a house and a unit) in both and I have to say they are currently performing pretty evenly.
Campbelltown has the widening extended highway program underway, whereas Penrith area is undergoing quite a lot of gentrification and investment itself. Being part of Sydney I don’t think you’ll have too much trouble renting out in either suburb, particularly if you choose areas close to facilities such as shops, public transport, or good schools and don’t choose to buy on a busy main road.

If I had to choose however I would go Penrith. The hospital is undergoing expansion, you’ve got the Western Sydney University which is also expanding, the Westfield is great, slightly closer to Badgery’s creek so you may get an influx of workers there. There’s also a new IKEA being built in nearby Marsden Park.
The biggest reason for me however is that Penrith is at the foot of the Blue Mountains, so there’s not much further they can build out there. Limited land will result in higher price increases in future.

We were buying near Penrith two years ago, the new sub-divisions there (Jordan Springs, Mulgoa Rise) have done well since then. Campbelltown has been see some improvement after a ten year stagnation in prices.

I don’t know about normal,… numbers are misleading (they may be being snapped up within 1 day of being advertised, or they may be languishing on the rental market).
I look at Vacancy Rate figures:
http://www.realestateinvestar.com.au/Property/nsw/penrith#rentalStats-tab

Penrith as a region currently has a vacancy rate of 1.34%.
I consider anything under 2.5% to be in favour of the landlord as it means rental vacancy is under the national average.

Then I would try ringing a few managing agents in the area and getting their opinion on how long properties are sitting on the books. They are usually very helpful in giving this sort of information. If you do this you might want to ask what types of units/houses are most in demand: how many bedrooms, if a garage is essential, what things attract tenants most – air-con, gardens, built-in wardrobes etc, what streets and areas are best within the suburb…etc.

Sometimes an agent will even volunteer to look at an online ad for the property you are considering and give you a ballpark appraisal of rental figures. They don’t have a vested interest in giving you an inflated price so you could trust the information a bit better than coming from a sales agent.

It depends on what you want to do with the properties.
If you are looking to improve value and get capital gains, I guess you could do that more easily with a house with potential to build granny flats, renovate, develop etc.

If you are looking to just buy and hold I always find units are easiest because of very low maintenance. Some would argue that you have to pay body corporate/strata but with a house you have to pay high building insurances anyway, so works out the same in my opinion.

In any case, if I had nailed down the suburbs I was targeting I’d be focusing on yields to ensure my holding costs were kept low.
In the case of St Marys, units would be my bet. 6.13% isn’t spectacular, but it makes it affordable to hold.
Units: 6.13%
Townhouses: 5.71%
Houses: 4.67%

To further research and make sure you’re choosing the right type of property take a look at what types of dwellings most people live in on the ABS website:
http://www.censusdata.abs.gov.au/census_services/getproduct/census/2011/quickstat/12405?opendocument&navpos=95
Scroll down to the Dwellings section.
Looks like most people live in a 3 bedroom house, followed by townhouses, then units.

So houses are more popular but more expensive to buy and hold.
Units are cheapest with highest yields but possibly not as much in demand because renting a house is probably almost similar price to renting a unit – so you’d have to find something quite special about it (location to station and shops? renovated? new?)

What is the vacancy rate of St Mary’s? The investor interest in the area could have influenced whether it is a renters or vendors market. It could also be a bit of a more difficult time to rent as everyone is usually settled this time of year – but I am saying this more in principle rather than as a certain comment about St Mary’s per se.

Thread started on July of last year.. Keen to hear the OP’s investing position 8 months on…. :D