Hi All,
Desperately needing someone to help unjumble my brain and give me some good arguments for and against newish units (i.e. not brand new or Off the Plan) vs older (70’s block) as I see strengths and weaknesses in both but can only buy one.
So for the newish units I really like the areas of Alexandria and Erskineville, I would prefer to buy an older unit in one of these suburbs to manufacture some capital growth, but as they are like gold dust in my $300-425K budget, I think the newer one beds are realistically my only option at this stage, with the additional benefit of being able to get some reasonable depreciation benefits since they are post 1985.
As for the older units I have so far been targeting 2 beds in the 70’s blocks of Kogarah, Ryde and Marrickville, although I cant help but feel the value is very quickly disappearing out of Kogarah.
Obviously as an investor my goals are primarily CG, however I also feel a reasonable 5.5-6% gross yield as a minimum is probably wise as I think the next 2-3 years will be fairly slow CG wise, and so want to hedge my bets a bit and not overly expose myself to too much risk.
Anyway the point of all this is I would love to here advice from some of the many experts on these forums as to what they would recommend and why given my goals, and also if anyone thinks I am barking up the wrong tree with regards to my choice of areas or property types.
Really looking forward to some feedback.
Mr M
newish units have the advantage that the previous owner/s have paid the developer’s premiums and the prices now may be less or about the same as when new. Maintenance costs would also be lower.
Expect older units to have more scope for special levies for repairs, breakdown or replacements. A well maintained/refurbished unit will always rent well.
You Could also seek out the surrounding suburbs eg Turella.
I think the newish unit would be better, taking into consideration the maintenance and repair costs.
Thanks guys, great feedback, please keep it coming.
Hi Monopoly
I actually prefer the older units as there’s generally more potential to add value. There’s not a whole lot that can be done to a new one bedroom unit – therefore, you really just have to sit back and let the growth kick in.
On the flipside – an older unit that can be tarted up could result in instant equity, enabling you to move on to your next purchase quicker.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Have you thought investing just a little farther afield. I have a mid 80's unit in the Maitland area of the hunter valley that i bought 5 years ago. At its current value of $135-140k it returns me about 6% ($160 per week). Properties in this area are cheaper than Sydney obviously, and capital gains are strong as it is a growth area, when I sell the property later this year I expect my gain to be about 25%.
Just a thought, your outlay therefore risk is less, returns and growth are good; my property has not been vacant for a single day over the 5 years I have owned it.
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