Hi, Im relatively new to this forum (1st post), although I have read Steve’s book(and loved it), and I have to say that I am still intrigued and almost bewildered at the level of sucess that so many of you have had. Congratulations.
I see that most of you make your money in the Melbourne market. But is there really any money to be made in Sydney??
Im finishing uni this year and Ived saved up a small fortune over the years.
Next year I plan to buy an IP. I plan to give it a quick reno, then rent it out for a year (hopefully cf+ or near to), and then sell or refinance and continue on….Ive been focusing on the inner west (Leichhardt, Haberfield, Petersham, Ashfield etc) Ive found that prices are way too high to turn into cash flow+ IPs (even with one helluva reno). Sure there is some potential from capital gains but I find this a bit risky considering the amount of money one would have to fork over (at least $400 000 for any house on a decent site).
Has anyone here had much experience in the Sydney market? If so do you believe there are cash flow+ oppurtunities out here?? I think properties are too expensive and one would have to travel out west, or possibly central cost for a reasonble deal.
What are your thoughts??z1,
I’m not sure if it’s true that ‘most people’ on this forum made their money in the Melbourne market.
Personally I’ve made a substantial amount in Sydney and elsewhere.
It’s tough to find cashflow positive properties in good suburbs in Sydney…some might say nearly impossible.
You just have to be quite creative (within the law).
And remember that positive cashflow can occur with negatively geared properties.
Cheers,
Aceyducey
Personally I’ve made a substantial amount in Sydney and elsewhere.Is this from a basic Buy & Hold strategy?
You just have to be quite creative (within the law). And remember that positive cashflow can occur with negatively geared properties.Can you please elaborate on how one can be legally creative and how positive cashflow can occur with a negative geared investment.
Sorry, the search function on this site is not the best… unless you can point me in the direction of a forum I should read?
Thanks,
Buddywuf.With Carr keeping thje Vendor Tax prices are bound to keep falling which means more buying opportunities
Nigel Kibel
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You are right in thinking that it would be difficult to find a place for anything less than 400k in this area. The medium house price in inner west sydney is about $680k. You can always get a unit or ‘renovators delight’ for cheaper, but it is a high entry point and unlikely to be cash flow positive.
(I have noticed a few places lately on the market at the relatively cheap price of mid 400s. They need renovation).
I would suggest that capital growth is not currently strong enough to recommend selling after only one year. Buying and selling costs are so high that you would most likely lose money in such a short period of time (especially with our beloved Vendor’s tax). Property is generally considered a mid to long term investment – the exceptions being when you get ‘creative’.
Creative practices can include renovation, rezoning of property use, subdivision, development, etc – but all generally require a higher entry point/cash component and are probably not suited to the innerwest area (except renovation).
Even when you employ the above tactics, you are often better off holding, and using the equity to secure more IPs, rather than selling up and paying large associated costs.
As the market is slower, you can afford to take your time and research. Put in some low ball bids on the offchance that the vendor accepts and you get a bargain. Still make sure you’ve done your figures and can afford it. It is very difficult to be cf+ in a major metro area, unless you have a big deposit or can better use the property in a creative manner.
Make sure you know who you intend to rent to and how much they will be willing to pay before you buy. The upper end of the rental market will not be content with a ‘quick reno’ – they rent properties that offer an aspirational lifestyle. Therefor you can only expect a mid to low range rent if you refrain from an uber-stylish (expensive) renovation.
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