Hello,
I am new to property investing and have done a lot of research on the internet along with purchasing myself an investment magazine with all those suburb data/price guides. My current strategy is to purchase a property with good rental yield and capital growth (which I am finding quite hard!), lease it out and pay it off as quickly as possible to build up equity and reduce the interest paid. I don't want my first investment to change my lifestyle so my budget is quite small at around $280k and under. This will allow me to continue living a comfortable/enjoyable life with no financial restrictions.
The main problem I'm finding is which suburb to invest in. The properties with high rental yield seem to be situated in suburbs with low 5yr capital growths. Also, I am not sure how to interpret & use the capital growth data, do I look at last 12 months, average annual growth, last 3yrs or last 5yrs growth? And is it really so bad to invest in a suburb that's well known for it's predominant race/religion – e.g muslims? There are a lot of really cheap units that are only 15kms from the city of sydney like wiley park, but I am sceptical on whether there is much growth in these suburbs?
Exhibit A:
Property is situated in the west within 20kms from the city of sydney
10min walk to the closest station
40-50min train ride to the city
Nice 2 bedder unit within my budget
15% islam
21.84% last 12 month growth
6.14% avg annual growth
17.9% last 3yr growth
15% last 5yr growth
5.55% rental yield
0.3% vacancy rateExhibit B:
Property is situated in the west within 16kms from the city of sydney
5-10minmin walk to the closest station
30min train ride to the city
Nice 2 bedder unit within my budget
40% islam
17.14% last 12 month growth
7.64% avg annual growth
32.97% last 3yr growth
9.33% last 5yr growth
6.55% rental yield
1.1% vacancy rateGiven the above stats, both have their pros and cons and this is where I need help on how to interpret the data and make a decision. Please let me know what you think and what you recommend!
Sometimes you can look too much into the stats and oversee the items that make you money…… You should buy when you understand an area and what is goood value. There is a lot more to investing then you can gather from a online chat….. I am happy to sit down with you at your earliest convenience.
Re: paying down the loan as quickly as possible, I consider this old school……..
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