hi everyone, relatively new to the forum, only found out about it today from a friend of mine who thought it may be of interest to me. what a wealth of information lie in this site! i have a long weekend full of reading.
now skipping the pleasantries, the purpose of this post:
i am 22yrs old living in melbourne, and alongside my brother, will be relocating to sydney for work commitments. we will both be on a salary of 50K p.a to begin with. my office is in the homebush area and we've decided to live close to my work. i have shortlisted potential suburbs including: burwood, strathfield, rhodes, meadowbank.
real estate websites indicates rent in those suburbs for a newish 2br unit/apartment is on average $480-550p/week. multiply 4weeks = $1920-$2200 for a month.
real estate websites also indicate that one could buy a similar 2br unit/apartment for about $380,000-450,000. using a nab online calculator the monthly repayment would be $2,216 through to $2,625 (7.00% interest, across 25yrs, interest only loan), excluding strata/council fees/water
towards the lower end of the spectrum on the two examples, it appears a small difference between renting and buying, except one option will help build equity for future investments.
however on the other hand, renting would be 'less hassle' (can just pack up and leave) and slightly cheaper. The fact renting is slightly more affordable would mean my brother and i can save more money for a house rather than a unit/apartment.
at the moment neither of us have investment properties and my brother will go halves with me, whether we rent or buy.
would be keen to see what you guys think on this dilemma.
cheers
Hi, do you need a unit that expensive? If you want newish I guess you'll pay for that. Will you be able to buy a newish unit for $380-450K? Just trying to compare apples with apples.
Compare what you'd be renting with what you'd be buying first. I thing the rent would be lower and the costs (by the time you add strata, council rates, water rates, repairs) etc will be higher. More like $3000pm. Don't forget buy costs (stamp duty $8K? solicitor $2K)
So say an extra $1000pm?I'm not saying it's not worth looking at. It is but know what you are comparing. If you do buy consider that you may not stay there forever so be careful how you set up the loans to take into account that it may be an investment property in the future.
Sydney is set for some growth (IMO) so could see you sitting on some nice equity if/when you do sell.
some great points catalyst. so here is an example of apples with apples:
a 2br apartment on 81 church st lidcombe, nsw.
to rent–
http://www.realestate.com.au/property-apartment-nsw-lidcombe-407865357$480 p/week or about $2083.2 p/month.
$1041.6 per person, p/month
to buy–
http://www.realestate.com.au/property-apartment-nsw-lidcombe-110610573$388,000
quarterly costs
strata $977
council $208
water $148
or $5332 per year or $444.33 per monthmortgage $2,344 per month (nab loan calc. 7.25% interest, 25years, interest only)
mortgage plus quarterly costs per month $2788
$1394 per person, p/month
have i encapsulated the scenario realistically here?
my parents have said before that they'd graciously to take care of the administrative side of buying our first property (ie stamp duty, legal)
and to your point about setting up the loan correctly, i will definitely seek advice on this, if i go down the path of buying.
i am still not clear whether to buy or to rent when i move to sydney!!
McBeefy, depends what you want to do. You can pay your rent and just as you say pack up and leave when the lease ends or you can buy and build up equity while you pay the mortgage. In the longer term, property is a good investment.
It would be a good idea to rent first and get a look at the market- what is a good area and what is not. So move in where you want to – test it out then you can make a better decision.
What looks good on a web site may not necessarily be the case when you get there. There is nothing like “eyeballing” property rather than just off the net.
There is another option and that is to rent where you want to be and buy an investment property where you can afford. That way you have the best of both worlds- living where you want to and being in the market to build up equity at the same time. Although you probably dont want another option as you seem undecided on what you have at hand.
if mum and dad are keen to help with costs then I really dont see why you dont buy. If you dont take their offer- swing them my way- I’d love someone to pay my fees for me!! LOL
It also a good idea to get feedback from a broker. Calculators are great on a site but when you actually get to the buying bit – there is so much more you need to understand – like would a bank actually lend you that amount? Brokers are great because they can model figures for you. And they can give you a “pre-approval” so you know what you can go shopping with.thank you for your reply, WomeninPropMelb. some excellent points to consider indeed. with my relocation not until 2013, i have got what i need to get the ball rolling.
ps. im loving your business niche as well- supporting women to invest in property!
Thanks! We started out just meeting over coffee and chatting about property but grew and grew.
For some reason, blokes wanted to come too?
HHmm… not sure if it is the property or….. the “women”….
All in all- its great to share with others in an informal way what we are each doing in our property investing journey.
Feel free to drop me a line if you would like feedback or to chat about your directions and ideas.
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